Lower Colorado River Authority v. Texas Department of Water Resources

SHANNON, Justice,

dissenting.

I file this dissent respectfully.

The central question in this appeal concerns the meaning of the term “unappropriated water” as used in Tex.Water Code Ann. § 11.134(b)(2) (Supp.1982).

The Colorado River rises in intermittent draws in Dawson County in West Texas and flows generally southeast approximately six hundred miles to its mouth on Mata-gorda Bay. I Texas State Historical Association, Handbook of Texas 380 (1952).

The Colorado and its tributaries, the principal ones being the Pedernales, Llano, San Saba, and Concho Rivers, have a drainage basin of approximately 37,800 square miles. Texas State Historical Association, I Handbook of Texas 380 (1952). On occasion, the river experiences great rises when there is more water than anyone wants or needs, and flooding becomes a problem. Conversely, the regions through which the river flows often suffer withering droughts and the river then has extremely low flows. It is a fair statement that the Colorado is an inconstant stream.

The water of the Colorado and its tributaries furnishes part or all of the municipal water requirements of Midland, Odessa, Big Spring, San Angelo, and Austin, and are used throughout the basin for irrigation, manufacturing, hydroelectric generation, and other purposes.

There has been much previous development of the waters of the Colorado by construction of several dams and reservoirs. Appellee District presently owns and operates Lakes J. B. Thomas, located between Snyder and Big Spring, and E. V. Spence, near Robert Lee. San Angelo, together with the U. S. Bureau of Reclamation and the U. S. Corps of Engineers, maintains three reservoirs on the Concho and its branches, Lake Nasworthy as well as the Twin Buttes and O. C. Fisher Reservoirs. LCRA operates six lakes on the Colorado in Central Texas: Lakes Buchanan, Inks, Lyndon B. Johnson, Marble Falls, Travis, and Austin.

The site of the proposed Stacy Dam is on the river in Coleman, Concho, and Runnels Counties. The permit granted appellee District allows it to impound 554,340 acre-feet of water in the reservoir and to divert and use 88,000 acre-feet of water yearly for domestic and municipal purposes and 25,000 acre-feet of water per annum for industrial purposes.

By statute, the Commission is empowered to grant a permit to appropriate water only if it finds that unappropriated water is available in the source of supply. Tex. Water Code Ann. § 11.134(b)(2) (Supp. 1982). The Commission made that finding affirmatively in number fifteen, the only provision in the agency order addressing the adequacy of unappropriated water to support the proposed appropriation:

After recognizing downstream existing appropriations and claims below Stacy Dam, the Commission finds that there are unappropriated flows in the Colorado River at the dam site sufficient to permit the impoundment of 554,340 acre-feet of water at elevation 1551.5 feet above mean sea level and the diversion and consumptive use of not to exceed 113,000 acre-feet of water per annum without impairing existing water rights, provided releases of water from the reservoir are made from time to time in such quantities as may be necessary to provide water to which all superior and senior water rights are entitled. (Emphasis added)

*576Nonetheless, the amount of unappropriated water available in the Colorado River according to the records of the Commission is only an insignificant fraction of the total acre-feet applied for by appellee District and ultimately granted appellee District by the Commission. The differences between the parties to this proceeding do not concern a determination of the amount of water physically present in the river, but instead concern divergent views as to the meaning of “unappropriated water” as used in Tex.Water Code Ann. § 11.134.

An examination of fact finding fifteen in an effort to determine the Commission’s rationale supporting its determination of the existence of unappropriated water is not helpful. Rather than being “concise and explicit,” as provided by Tex.Rev.Civ. Stat.Ann. art. 6252-13a § 16(b), the finding, as aptly characterized by LCRA, is instead “vague and indecisive.” Finding fifteen contains simply the bare statement that the Commission, after recognizing downstream appropriations, found sufficient unappropriated flows to permit im-poundment of 554,340 acre-feet of water. In dealing with this character of problem, the Supreme Court has stated: “It will not do for a court to be compelled to guess at the theory underlying the agency’s action; nor can a court be expected to chisel that which must be precise from what the agency has left vague and indecisive. In other words, ‘We must know what a decision means before the duty becomes ours to say whether it is right or wrong’.” Securities & Exchange Commission v. Chenery Corp., 332 U.S. 194, 196-97, 67 S.Ct. 1575, 1577-78, 91 L.Ed. 1995 (1947).

I have examined finding fifteen, and after the most careful reading, the authority, reasons, and logic employed by the Commission in its discovery of a huge quantity of unappropriated water existent in the Colorado remain shrouded in delphic mystery. On review, then, the majority and I have been relegated to an inspection of the parties’ explanation of the Commission’s rationale.

The Lower Colorado River Authority insists that the assessment of the extent to which the waters of a river are appropriated, for purposes of granting or denying a permit, must be based upon the quantities specified in the outstanding permits and certified filings. Therefore, if a permit has been issued for the use of water, the water specified in that permit is not subject to a new appropriation by the Commission until the permit has been cancelled in whole or in part.

Counsel for the District and Commission advance the argument that “unappropriated water” refers to water which is not currently being used by existing appropriations and which is probably not going to be beneficially used by those appropriations in the near future. Presumably, the determination of the probability of future beneficial use under this concept of unappropriated water is to be made on an ad hoc basis in each application proceeding by “experts” who project population growth and other factors thought to affect future water use.

Appellees’ view is that existing water right holders are considered to have appropriated only so much water as may have been beneficially used by them as of the date of the hearing, in addition to those amounts as the Commission finds will be foreseeably used by them in the future. Supposedly, the Commission will make this evaluation in each hearing for a permit based upon the record in each proceeding, unfettered by prior determinations and without regard to the quantity of appropriated water stated in the outstanding permits. Under appellees’ view, outstanding rights which have been perfected by use may be reduced from presently perfected use if, in the Commission’s opinion, their future use will be less than present or prior use.

I do not agree with appellees’ rationale in support of the Commission’s finding for several reasons. One reason is that their argument is in total conflict with the expressed legislative intent that applications for appropriation of water be considered by the Commission in a consistent and uniform *577manner. The system for regulating use of water by granting administrative appropriation permits was first enacted by the legislature in 1913 and later re-enacted in 1917. 1913 Tex.Gen.Laws, ch. 171, at 364; 1917 Tex.Gen.Laws, ch. 88, at 211. The statutes presently applicable to applications for permits to appropriate water (§ 11.134(b)) are substantially the same as the original Act of 1913. Frank R. Booth, Applications for Permits to Appropriate Water, Proceedings of the University of Texas Water Law Conference 96 (1959).

Section 19 of the 1913 Act reads:

It shall be the duty of the board to reject all applications and refuse to issue the permit asked for, if there is no unappropriated water in the proposed source of supply; or if the proposed use conflicts with existing water rights, or riparian rights, or is detrimental to the public welfare. It shall be the duty of the board to approve all applications and issue the permit asked for, if such application is made in proper form in compliance with the provisions of this Act and the regulations of said board; and is accompanied by the fees required in this Act; and if the proposed appropriation contemplates the application of water to any of the uses and purposes provided for in this Act; and does not impair existing water rights, or riparian rights, and is not detrimental to the public welfare. 1913 Tex. Gen.Laws, ch. 171, at 364. (Emphasis added).

Section 11.134(b) of the Texas Water Code reads:

(b) The commission shall grant the application only if:
(1) the application conforms to the requirements prescribed by this chapter and is accompanied by the prescribed fee;
(2) unappropriated water is available in the source of supply; and
(3) the proposed appropriation:
(A) contemplates the application of water to any beneficial use;
(B) does not impair existing water rights or vested riparian rights; and
(C)is not detrimental to the public welfare. (Emphasis added)

The 1913 Act supplanted a scheme of state water rights based on local filings, the primary characteristic of which seemed to be disorder. Under the local filing system, it was impossible to measure outstanding claims or the availability of unappropriated water on any particular segment of a stream. The 1913 legislature considered the then existing laws governing water rights to be in an “unsatisfactory condition,” impeding economic development. 1913 Gen.Laws, ch. 171, § 102 at 379. The 1913 Act sought by the centralized permit system to bring order into the regulatory process:

The principal purpose and function of the 1913 Act was to substitute the permit system (of obtaining a statutory water right under state administration) for the ex-parte declaration of the appropriative system theretofore existing under the General Irrigation Acts of 1889 and 1895. City of Corpus Christi v. Nueces County Water Control & Improvement District, 540 S.W.2d 357, 372 (Tex.Civ.App.—Corpus Christi 1976, writ ref’d n. r. e.).

The permit system reflected an effort to achieve control over water appropriations, and thereby obtain more certainty in an area of law where certainty is essential. The development of irrigation systems and adequate municipal water and power sources required capital, and capital was not then, and is not now, forthcoming in an atmosphere of legal uncertainty. As a result, the legislature passed the 1913 Act with the express purpose of settling uncertainties in the law so as to attract capital:

Not only are riparian and other existing water rights protected [by the Act], and established enterprises safeguarded; but a foundation is afforded to new development. Under our present statutes the appropriator who, in good faith, complies with all the requirements thereof does not know whether he has obtained anything thereby, nor can he offer any assurance of that fact to those from whom he would obtain capital to develop his enter*578prise. Who will advance funds for costly improvements, dependent for their value solely upon a water supply that may exist today and tomorrow be numbered among the things that were? How many individuals and communities in this State . .. have sought to interest capital and been met upon the threshold by the legitimate and unanswerable objection: “You have no adequate protection under the law to assure the water supply upon which your proposition depends?” When the provisions of this bill are complied with and a permit obtained, a reasonable assurance of title and of legal protection of the rights involved can be shown. Tex.H. R.J., Thirty-third Legislature 949, 954 (1913). (Emphasis added throughout unless otherwise noted.)

Moreover, the provisions of the 1913 Act, particularly the requirement that the Board of Water Engineers reject an application if there is no unappropriated water, were designed to insure those who obtained permits of a definite supply of water for their present and future needs. As stated by Representative Glasscock, one of the authors of the 1913 Act:

In the public hearing before our committee [the Committee on Irrigation] the most grave complaint and strongest plea for relief was presented by those who had made extensive development of irrigation and other enterprises, in some cases operated for years, only to be deprived of their water by more recent diversion of the supply at an upper point upon the stream. . . . Now, in this bill we take, as we must, all existing rights as we find them . .. and leaving these existing rights undisturbed, undertake to protect them, to remedy the grave condition mentioned that an existing enterprise may be ruined by subsequent diversion of its water supply above its point of intake, and to provide a safer rule for the future, by the application of certain important and underlying principles.... Tex.H. R.J., Thirty-third Legislature 949, 953 (1913).

One of the principles enumerated by Representative Glasscock to insure a “safer rule for the future” was that it would be the duty of the Board of Water Engineers “to reject all applications and refuse to issue the permit asked for, if there is no unappropriated water in the proposed source of supply.” This precept can be effective only if the method of determining whether unappropriated water exists is based upon a reasonably certain determination of the amount of water previously appropriated and the amount of water available for future appropriation. On the other hand, if the measure of unappropriated water were based upon present and future projected use, the problems sought to be resolved by the permit system would hardly have been addressed because capital investments would not be encouraged by a system in which one’s practical right to water is predicated on speculation and the inexact art of forecasting use.

The most basic doctrine of statutory construction is that courts must ascertain and give effect to legislative intent. Jessen Associates v. Bullock, 531 S.W.2d 593 (Tex.1975). If, indeed, the legislature has spoken, it cannot be said that the courts should make a different choice simply because that choice seems, at the moment, to make better sense. All too often courts are required to divine the meaning of statutes in the absence, or near absence, of any objective indication of legislative intent. In this appeal, however, as previously demonstrated, the legislative purpose is made plain. The legislature intended by the 1913 Act to bring order and certainty to Texas water law so as to encourage capital investments and to protect appropriators’ reliance on their permits and certified filings. These purposes were to be accomplished by having one administrative agency administer the program and then by requiring uniform and consistent procedures and standards for the application and granting of such permits. It is apparent that the legislature believed that by means of such legislation, in particular the requirements as to the contents of the applications and permits and the requirement that the Board of Water Engi*579neers “make or cause to be made measurements and calculations of the flow of streams from which water may be appropriated” 1913 Tex.Gen.Laws, ch. 171, § 42 at 368, it would be possible to measure with some certainty on any one watershed the extent of water subject to outstanding rights and the extent of unclaimed water subject to further issuance of permits.1 Since § 19 of the 1913 Act is the basis for § 11.134 of the present Water Code, the legislative purpose in the enactment of § 19 should be controlling in construction of the term “unappropriated water” as employed in § 11.134.

Since the enactment of the original statute in 1913, the legislature has consistently reaffirmed the concept that unappropriated water is defined, in part, by giving consideration to the quantities stated in outstanding permits and certified filings. In 1953, the legislature first enacted the ten year cancellation provisions, now codified as Tex. Water Code Ann. §§ 11.171-11.186. The emergency clause of the 1953 Act, 1953 Tex.Gen.Laws, ch. 352, at 868, provided:

Sec. 5. The fact that there are many permits heretofore granted by the Board of Water Engineers and certified filings heretofore filed with said Board, under which no part of the water authorized to be diverted and appropriated has been put to beneficial use and the further fact that there is great need for making such water available for beneficial use creates an emergency and an imperative public necessity that the Constitutional Rule requiring that bills be read on three several days in each House be suspended, and the same is hereby suspended, and this Act shall take effect and be in force from and after its passage, and it is so enacted. (Emphasis supplied)

In 1957, the 1953 ten year limitation provisions were amended. 1957 Tex.Gen.Laws, ch. 39, at 82. In addition to making specific provisions that the waters covered by can-celled permits would be subject to reappro-priation, the legislature again stated in the emergency clause that one of the purposes of amending the cancellation provisions was to make water available for further appropriation. The emergency clause provided:

Sec. 3. The fact that the present law does not provide for total and partial cancellation of certified filings and permits even though all or a part of the water is not being appropriated and beneficially used thereunder, the fact that a public need exists to make such water available for appropriation and beneficial use, and the further fact that the present law needs to be clarified so as to remove inconsistencies, create an emergency and an imperative public necessity that the Constitutional Rule requiring bills to be read on three several days in each House be suspended; and said Rule is hereby suspended, and this Act shall become effective and be in force from and after its passage, and it is so enacted. (Emphasis supplied)

The Supreme Court in Texas Water Rights Commission v. Wright, 464 S.W.2d 642, 647 (Tex.1971), sustained the ten year cancellation provisions against a constitutional attack. The Court in Wright observed that one of the purposes of the cancellation statute was to make unused water covered by a permit available for reappro-priation.

The permittees did not acquire the right of non-use of water. Common to the law of the western arid regions and of appropriation law generally is the idea that non-use of appropriated waters is a waste of the water. Once water is appropriated, its availability to another user is reduced or defeated, and if the permittee does not use a substantial portion of it the water will run unused into the sea. A workable system of appropriated *580waters has produced the general rule that the beneficial use of waters is the conservation of the resource, whereas, the non-use of appropriated waters is equivalent to waste. (Emphasis added)

Accordingly, it may be seen that the reference in § 11.134(b)(2) is not an isolated occasion of legislative concern about which water is and is not available for appropriation. Each time the legislature has provided a mechanism by which rights under a permit or certified filing may be forfeited, it has plainly indicated that water in a permit or certified filing, until forfeited or cancelled, is “appropriated water.”

There are other legislative enactments in support of the definition of unappropriated water advanced by LCRA. For example, section 49 of the 1913 Act (Section 46 of the 1917 Act, and presently § 11.030 of the Texas Water Code) provides:

Sec. 49. Right Forfeited by Abandonment. — Any appropriation or use of water heretofore made under any statute of this State or hereafter made under the provisions of this Act which shall be willfully abandoned during any three successive years, shall be forfeited and the water formerly so used or appropriated shall be again subject to appropriation for the purposes stated in this Act. 1913 Tex.Gen.Laws, ch. 171, at 370. (Emphasis supplied)

Texas Water Code § 11.146(e) (Supp. 1982), of course, is a further prime example:

If a permit has been issued for the use of water, the water is not subject to a new appropriation until the permit has been cancelled in whole or part as provided by this section. (Emphasis supplied)

Section 11.146(e) is in complete harmony with the principle that the Commission in determining unappropriated water must give consideration to the quantities stated in outstanding permits and certified filings.

Appellees persist that their definition of “unappropriated water” is the better view today in a dry and thirsty land. They urge their view would prevent “untold waste of water resources” which would otherwise flow into the sea. There may be validity to appellees’ suggestions, but such policy arguments are properly addressed to the legislature to change the law rather than to courts to construe that law. However attractive appellees’ policy argument may be, it must yield to the prior legislative determination of which measure is in the public interest. In considering a statute wherein it is not clear whether the legislature has considered and answered a particular question, courts may legitimately consider policy arguments. On the other hand, it is basic law that if the language of the statute or the legislative history of the statute evidences that the legislature has considered the question and provided an answer, the duty of the courts is to respect and give full recognition to the legislative answer. In such situations, as here, the legislature presumably has considered and weighed the conflicting policies and arguments, and the courts must defer to the legislative determination.

If, as appellees assert, users downstream from the proposed Stacy site are not using the water to which they are entitled by permit or certified filings, the solution mandated by the legislature is for the Commission to initiate cancellation proceedings pursuant to Tex.Water Code Ann. § 11.174 (Supp.1982).

Appellees’ view of unappropriated water is faulty for the further reason that it conflicts with the view of the Supreme Court of Texas stated only a few years after enactment of the Acts of 1913 and 1917. Motl v. Boyd, 116 Tex. 82, 286 S.W. 458, 475 (1926). The Court in Motl stated:

It is the duty of the [Board of Water Engineers] to reject applications where there is no unappropriated water in the source of supply. The facts as to that question can be determined by the [Board of Water Engineers] by the mere matter of adding up the amount of water previously appropriated and shown on their records, and subtracting it from the amount of state water which they had previously determined the stream furnished.”

*581The Commission characterizes the Supreme Court’s opinion in Motl as “overly simplistic,” while the District seeks to minimize the importance of the quoted part of the opinion by describing it as “somewhat simplistic and generally discredited dicta.” The District suggests further that the “validity today [of the quoted language from Motl v. Boyd] is doubtful.”

It is true that Motl has been criticized and some parts of the opinion have been overruled. See Valmont Plantations v. State, 163 Tex. 381, 355 S.W.2d 502 (1962). The quoted language from Motl is not the holding in the case, but it is an expression by the Supreme Court only a few years after the enactment of the 1913 and 1917. Acts as to its understanding of the appropriate process.

Administrative agencies are governed by statutes, as construed and applied by courts. In this proceeding it is abundantly clear that it was not the office of the Commission, the district court, or this Court to ignore the expression of the Supreme Court in Motl v. Boyd, supra, and embark upon a construction of their own choosing.

The Commission’s definition of unappropriated water in the present controversy is a departure from the definition adhered to by its predecessors. The Commission and its predecessors determined the existence of unappropriated water by applying the Motl v. Boyd formula. For example, the 19th Biennial Report to the Governor (1948-1950), of the Board of Water Engineers, the Commission’s predecessor, stated, at page eight:

The procedure for obtaining a permit has been made as simple as possible, although the Board does require sufficient data to be filed to establish, when the permit is granted, that the appropriator has legal claim to a water right, and to permit the location of this right to be determined. Such data are necessary in order that a continuous inventory of all appropriations will show the relation of total annual appropriations to the annual runoff of each stream, and thereby insure that the streams do not become over appropriated and that a prospective applicant for [a] permit can determine whether a suitable supply is available for a particular project. (Emphasis supplied)

Likewise, A. R. Rollins, while serving as a member of the Board of Water Engineers, stated that “[t]he Board of Water Engineers, under present methods of operation, recognizes the total appropriations on a stream when it is considering a new application.” Rollins, The Need for a Water Inventory in Texas, Proceedings of the University of Texas Water Law Conference 67 (1952). In another paper presented at the same conference, V. W. Bouldin, whose knowledge of water law is highly respected, stated that:

Under the statutes as interpreted by the Attorney General, the waters covered by [outstanding] permits are not subject to re-appropriation until the permits have been cancelled. V. W. Bouldin, The Law of Surface Water Rights in Texas, Proceedings of The University of Texas Water Law Conference 97, 102 (1952).

See also Thompson, Public Administration of Water Resources in Texas 128 (1960).

The fact that the Commission has now decided that it possesses the power to determine “unappropriated water” based on beneficial use and has acted on that decision may not be supported by an appeal to the rule of contemporaneous construction. It would be strange indeed if an agency could by mere process of construction create for itself a power which the legislature had not given it. Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co., 167 U.S. 479, 17 S.Ct. 896, 42 L.Ed. 243 (1896); Railroad Commission v. Atchison, Topeka & Santa Fe Ry., 609 S.W.2d 641 (Tex.Civ.App.1980, writ ref’d n. r. e.).

It may be that the time has come to revise the laws governing the availability of “unappropriated waters.” All would agree, however, that the revision of the law is properly the function of the legislature and not that of administrative agencies or courts. “Actual or supposed deficiencies in [the laws regulating the use of a natural resource] . .. will not justify a court’s ex*582cursion beyond its proper sphere in order to plug a hole or cure a supposed defect in the legislative scheme of things.” State ex rel. Edwards v. Reyna, 160 Tex. 404, 333 S.W.2d 832, 838 (1960); Southern Pacific Transport Co. v. Railroad Commission, 592 S.W.2d 74 (Tex.Civ.App.1979, writ ref’d n. r. e.); Railroad Commission v. Atchison, Topeka & Santa Fe Ry., supra.

1 would reverse the judgment and remand the cause to the district court with instructions that it order the Texas Water Commission to set aside the permit heretofore granted appellee District.

. [The provisions of the 1913 Act established] a procedure by which the rights in the waters of a stream might be ascertained, thus giving a warrant of safety to capital. For the first time a central repository for records of appropriations was provided, where the amount of water appropriated from a stream, and the amount available for further appropriation might be ascertained with some degree of certainty. Cox, The Texas Board of Water Engineers, 7 Texas L.Rev. 86, 96 (1928). (emphasis added)