OFFICE OFTHE ATTORNEY

GENERAL.

STATE OFTEXAS JOHN CORNYN

November 10, 1999

The Honorable Bill G. Carter Chair, Committee on Urban Affairs State of Texas House of Representatives P.O. Box 2910, GW.16 Austin, Texas 78768-2910 Opinion No. JC-0142

Re: Whether ahome-rule municipality may limit the number ofbuilding permits it will issue in the absence of an emergency, and related question (RQ-0061 -JC)

Dear Representative Carter:

You question the authority of a home-rule municipality to limit the number of building permits it will issue in the absence of an emergency. See Letter from Honorable Bill G. Carter, Chair, Committee on Urban Affairs, Texas House of Representatives, to Honorable John Comyn, Attorney General of Texas (Apr. 26, 1999) (on file with Opinion Committee) [hereinafter “Request Letter”]; Brief accompanying Request Letter, supra, at 1. You also ask whether a home-rule municipality may limit the number ofresidential building permits issued in agiven time period while not limiting the number ofnonresidential building permits. Subject tovarious caveats, we conclude first that nothing in federal or Texas law precludes a home-rule municipality from limiting the number of building permits it will issue, even in the absence of an emergency, in a given time period. We conclude second that a home-rule municipality may impose limits on residential building permits and not nonresidential building permits, subject to the equal protection clauses of the federal and State constitutions.

In January 1999 the Town of Flower Mound (the “Town”), a home-rule municipality, resolved to adopt aSMART Growth program inresponse tohigher than expected rates ofpopulation growth in recent years. See Brief accompanying Request Letter, supra, at 1. (“SMART Growth” stands for “Strategically Managed And Responsible Town Growth.” See Brief from Terrence S. Welch, Bickerstaff, Heath, Smiley, Pollan, Kever &McDaniel, L.L.P., onbehalfofTown ofFlower Mound, attachment 2 (June 16, 1999) [hereinafter “Town brief ”]; Brief from Arthur J. Anderson, Winstead Se&rest &Minick P.C., onbehalf ofHome & Apartment Builders Association ofGreater Dallas, to John Comyn, Esq., Attorney General, exhibit “C” at24 (June 4,1999) [hereinafter “Home & Apartment Builders Brief’]). Expecting that the population growth would overload the Town’s water, wastewater, and transportation systems and would adversely affect the Town’s “character and quality,” see Brief accompanying Request Letter, supra, at 1,the Town council intends the SMART Growth program to “manage both the rate and character of residential growth in Flower Mound.”The Honorable Bill G. Carter - Page 2 (JC-0142)

See Town Brief, supra, attachment 2 at4; Home & Apartment Builders Brief, supra, exhibit “C” at 25. The Town’s Resolution No. l-99, providing for the SMART Growth program, articulates the Town’s rationale:
WHEREAS, during an October 1998 review of preliminary

data with the Town’s impact fee consultants, itbecame apparent that the Town’s continued ability to provide adequate service levels to existing residents and businesses was rapidly being jeopardized;
WHEREAS, the threat to the Town’s ability to meet existing and near-term service demands isattributable to exploding population growth and (1) rapidly increasing water consumption, (2) rapidly increasing wastewater flows, and (3) increasing transportation system difficulties;

. . . WHEREAS, itis the objective of the Town to (1) achieve the community vision embodied in the Town’s 1994 Comprehensive Master Plan, (2) ensure the Town’s continuing ability to maintain adequate water and wastewater service while constructing system improvements to accommodate both residential and non-residential growth, (3) prevent increased traffic congestion and further deterioration of traffic safety and mobility while constructing transportation system improvements to accommodate both residential and non-residential growth, (4) maintain adequate water and wastewater capacity to sustain economic development efforts that will reduce the extreme imbalance in assessed valuation between residential and non-residential development, (5)preserve and enhance the unique character and lifestyle that currently exists in Flower Mound and (6) mitigate the ill effects of rapid and intense urbanization, such asovercrowding, overburdened infrastructure and municipal services, traffic congestion, loss of open space and agricultural land, environmental degradation and loss of a sense of place;
WHEREAS, the exemption ofnon-residential development is necessary to the long-ten-n economic health of the Town

. . .
FLOWERMOUND,TEXAS,RESOLUTION No. 1-99,Prearnble, at l-2.The Honorable Bill G. Carter - Page 3 (JC-0142)

The SMART Growth program has four components:
(1) An update of the Town’s 1994 Comprehensive Master Plan and areaffirmation ofthe community vision embodied in the 1994 Comprehensive Master Plan;

(2) Atemporary moratorium applicable toresidential Master Plan amendments, residential zoning amendments and residential development plans, ensuring future development will be consistent with the community vision expressed in the updated Comprehensive Master Plan;
(3) Amendments to the Town’s Building Code providing that residential building permits are valid for forty-five (45) days without construction commencing; and
(4) Consideration, after the update ofthe Comprehensive Master Plan and analysis of the Town’s water, wastewater and transportation systems, 

### oftheneedandfeasibility ofaplan to manageandequitably apportion residential buildingpermits in a manner that ensures the Town’s ability to maintain a defined level ofservice while accommodating reasonable and sustainable residential and non-residential growth.


### Id. 5 3, at 3 (emphasis added). You ask only about the fourth component of the plan, consideration ofagrowth-management plan that apportions, or “caps,” the number ofresidential building permits the Town will issue in a specified time period (the “growth-management plan”).

We consider only municipal authority generally to implement agrowth-management plan. We do not consider aparticular growth-management plan, and we cannot evaluate any ofthe various grounds on which the Town may choose to apportion building permits, e.g., aesthetic considerations, location, first-come-first-served, or random selection. See generally LAWRENCE B. BURROWS, GROWTHMANAGEMENT: I~~~E~,TECHN~QLE~ANDPOLICY IMPLICATIONS 83-91(1978) (describing annual permit limitations). Nor do we consider the accuracy ofany ofthe various conflicting factual allegations regarding the capacities of the Town’s water, waste water, and transportation systems. 

### Compare Brief accompanying Request Letter, 

### supra, at 1

### and Home & Apartment Builders Brief, 

### supra, at 4-5 

### with Town Brief, 

### supra, at 8-16. The opinion process is an inappropriate forum for resolving factual disputes. See, e.g., Tex. Att’y Gen. Gp. Nos. JC-0032 (1999) at4;JC-0027 (1999) at 3;JC-0020 (1999) at2. Finally, inresponding to your questions, we assume, without making any findings on the issue, that no emergency situation justifies the allegedly proposed apportionment.The Honorable Bill G. Carter - Page 4 (E-0142)

Because itis ahome-rule municipality, the Town may exercise any governmental power that the legislature has not withheld from it. 

### See Lipscomb v.Randall, 985 S.W.2d 601, 605 (Tex. App.-Fort Worth 1999, pet. dism’d) (stating that Town has “Ml power of self government”); see 

### also Proctor Y.Andrews, 972 S.W.2d 729, 733 (Tex. 1998) (citing 

### Lower Colo.Riv.Auth. v. City ofSanMarcos, 523 S.W.2d 641,643 (Tex. 1975) (stating that legislature may only limit power of, but may not grant power to, home-rule municipality). Ahome-rule municipality has “all the powers of the state not inconsistent with the Constitution, the general laws, or the city’s charter.” 

### Proctor, 972 S.W.2d at 733 (citing TEX.CONST.art. XI, 55). The legislature may circumscribe ahome-rule municipality’s broad power, but only if it does so “‘with unmistakable clarity.“’ 

### Id. (citing, e.g., 

### Dallas Merchant’s & Concessionaire’s Ass’n v. City ofDallas, 852 S.W.2d 489, 490-91 (Tex. 1993); 

### City ofSweehvater v. Geron, 380 S.W.2d 

### 550,552 (Tex. 1964)); 

### CityofSanta Fe v. Young, 949 S.W.2d 559,560 (Tex. App.-Houston [14th Dist.] 1997, no writ). Consequently, with respect to each ofyour questions, we analyze first whether agrowth-management plan comports with state and federal law. (We assume that an ordinance adopting a growth-management plan is authorized by the city’s charter.) Second, we consider whether the legislature has, ‘with unmistakable clarity,” limited ahome-rule municipality’s authority to adopt a growth-management plan.

With certain caveats, we conclude that ahome-rule municipality may, even in the absence of an emergency, limit the number ofbuilding permits the municipality will issue in agiven period of time. First, a growth-management plan does not appear to be generally inconsistent with constitutional and statutory law. Second, the legislature has not, with “unmistakable clarity,” forbidden a home-rule municipality to adopt a growth-management plan in the absence of an emergency.
A. Whether. in the absence of an emergency, a home-rule municioalitv mav implement a growth-manaeement Dlan, which limits the number of building Dermits the municinalitv will issue in a given period of time?

The general concept ofagrowth-management plan does not per se facially contravene federal
or state constitutional provisions. The Town must, however, adopt a growth-management plan in compliance with constitutional requirements regarding substantive and procedural due process. See U.S. CONST. amend. XIV, 5 1. Substantive due process is satisfied if a generally applicable ordinance “is designed to accomplish an objective within the government’s police power and if a rational relationship exists between the ordinance and its purpose.” 

### Mayhew Y.Town ofSunnyvale, 964 S.W.2d 

### 922, 938 (Tex. 1998), 

### cert. denied, 119 S. Ct. 2018 (1999). Procedural due process requires the government to provide a building permit applicant “an appropriate and meaningful opportunity to be heard.” Id. at 939. Depending on the particular facts surrounding the denial of a building permit application, we can imagine that amunicipality might nm afoul of one or more of these constitutional doctrines.

Nor does agrowth-management plan in the abstract contravene state statutory law. We have examined chapters 211, 212, and 214 of the Local Government Code. Chapter 211 provides municipal zoning authority. See TEX.Lot. GOV’TCODEANN.5211.003(a) (Vernon 1999). ChapterThe Honorable Bill G. Carter - Page 5 (K-0142)

212pertains to municipal regulation of subdivisions and property development. See 

### id. 92 12.002. Chapter 214 authorizes a municipality to regulate substandard buildings, see 

### id. 5 214.001; to regulate plumbing and sewers, see 

### id. 5 214.012; to regulate swimming-pool enclosures, see 

### id. 5 214.101; to formulate energy-conservation standards, see 

### id. § 214.901; and 

### to establish rent control, see 

### id. 5 214.902. None of these statutes preclude or conflict with a home-rule municipality’s authority to adopt a growth-management plan.
Moreover, a growth-management plan would appear to be consistent with section 219.002 of the Local Government Code, which authorizes the governing body of amunicipality to adopt a comprehensive plan to guide the municipality’s long-range development. See 

### id.$5219.002(a), ,003 (permitting municipality to adopt or amend comprehensive plan by ordinance following public hearing). The municipality may use its comprehensive plan to “coordinate and guide the establishment ofdevelopment regulations.” 

### Id. §219.002(b). Although chapter 219does not define “development regulations,” we believe that it would encompass municipal ordinances that restrict how land may be developed. See 

### id. 5401.003(a) (requiring home-rule municipality that “regulates and controls the use and development” of watersheds and flood-prone areas to file notice); David Hartman, Comment, 

### Risky Business: Vested Real Property Development Rights-The Texas Experience andProposalsfor the TexasLegislature tozmprove Certainty intheLaw, 30T~x. TECH. L. REV.297,325 (1999) (describing Hawaii and California statutes freezing existing development regulations, 

### i.e., laws “governing permitted uses of the land” and regulations “applicable to development ofthe property”) (quoting HAW.REV.STAT.546-127(b) (1996) &CAL. GOV’TCODE 5 65866 (West 1996)).

We further must conclude that the legislature has not, “with unmistakable clarity,” limited
ahome-rule municipality’s authority toimplement agrowth-managementplan that limits the number ofbuilding permit applications the municipality will issue per year. Again, looking at chapters 211, 212,214, and 219 of the Local Government Code, 

### seesupra, we find no statute that clearly forbids
a municipality to implement a growth-management plan in the absence of an emergency. We accordingly conclude that, even inthe absence ofanemergency, ahome-rule municipality may adopt
agrowth-management plan that limits the number ofbuilding permits the municipality will issue in
agiven time period.

A home-rule municipality may not, however, attempt to apply its growth-management plan to a building permit application filed before the plan was adopted. A municipality may apply its growth-management plan only tobuilding permit applications filed subsequent tothe adoption ofthe municipal ordinance enacting the plan. 

### See TEX.GOV’TCODE

### ANN.5245.002(a), 

### adopted byAct ofApr. 29,1999,76th Leg., R.S., ch. 73,§ 2, sec. 245.002,1999 Tex. Sess. Law Serv. 43 1,432-33; 

### Quick v. City ofAstin, 1999 WL 771291, *l (Tex. 1999) (stating that legislature may statutorily alter common-law rule that right to develop property is subject to intervening regulation). Section 245.002 of the Government Code requires, with certain exceptions, amunicipality to “consider the approval, disapproval, or conditional approval of an application for a permit solely on the basis ofany orders, regulations, ordinances, rules, expiration dates, orother properly adopted requirements 

### in effect at the time the original applicationfor thepermit isfiled.” TEX. GoV’T CODEANN.The Honorable Bill G. Carter - Page 6 (X-0142)



### 5 245002(a), 

### adopted by Act of Apr. 29, 1999, 76th Leg., R.S., ch. 73, 5 2, sec. 245.002, 1999 Tex. Sess. Law Serv. 431, 432 (emphasis added); see 

### id. 5s 245.003 - .004, adopted by Act of Apr. 29,1999,76thLeg., R.S., ch. 73,s 2, sets. 245.003 - .004,1999 Tex. Sess. Law Serv. 431,433 (delimiting applicability of chapter and listing exemptions).

In its brief to this office, the Texas Association of Builders relies on Estate ofScott v. 

### Victoria County, 778 S.W.2d 585 (Tex. App.-Corpus Christi 1989, no writ), for its argument that
a home-rule municipality may not implement a growth-management plan in the absence of an emergency. See Home & Apartment Builders Brief, supra, at 4. The Association raises an important, different issue.

The issue you raise iswhether ahome-rule municipality may institute agrowth-management plan. The issue in 

### Estate ofScott is whether a temporary moratorium prohibiting additional
sewer hookups in certain areas of the county constituted an unconstitutional taking for which the
owners must be compensated. 

### See Estate ofScott, 778 S.W.2d at 589-91. The appellants, who owned undeveloped tracts of land in Victoria County, claimed that the County unconstitutionally

“‘took’ their property without just compensation” by issuing the temporary sewer moratorium. 

### Id. at 586-87. Whether ahome-rule municipality has authority to undertake an action is different l?om whether it must provide compensation for actions under the takings provision of either the federal
or state constitution.

The Just Compensation Clause of the Fifth Amendment to the United States Constitution forbids the State to take private property for public use without just compensation. U.S. CONS. amend. 

### V; seeMayhew, 964 S.W.2d at 

### 933;Estate ofScott, 778 S.W.2d at 589. Article I, section 17ofthe Texas Constitution similarly prohibits the taking ofprivate property forpublic use “without adequate compensation being made.” TEX.CONST.art. I, $ 17; see 

### Mayhew, 964 S.W.2d at 933; 

### Estate ofScott, 778 S.W.2d at 589-90. A regulatory taking occurs if amunicipal ordinance “‘does not substantially advance legitimate state interests.“’ 

### Mayhew, 964 S.W.2d at 933 (quoting 

### Agins
v. City of Tiburon, 447 U.S. 255,260 (1980)). The United States Supreme Court has recognized several governmental interests as legitimate:

protecting residents f?om the “ill effects of urbanization[,]” 

### Agins, 447 U.S. at 261

. ; enhancing the quality of life[,] Penn 

### Central Trump. Co. v.New York City, 438 U.S. 104, 129 (1978); and protecting abeach system forrecreation, tourism, and public health[,] 

### Keystone [Bituminous CoalAss ‘II Y.DeBenedictis, 480U.S. 470,488 (1987)]; 

### Esposito v.South Carolina Coastal Council, 939F.2d 165, 169 (4th Cir. 1991), cert. denied, 505 U.S. 1219

. (1992). 

### Mayhew, 964 S.W.2d at 934. “The ‘substantial advancement’ requirement examines the nexus between the effect of the ordinance and the legitimate state interest it is supposed to advance.” 

### Id. Even if a municipal ordinance substantially advances legitimate state interests, it may constitute a compensable regulatory taking if it (1) denies alandowner of all economically viable use of his orThe Honorable Bill G. Carter - Page 7 (JC-0142)

her property, or (2) unreasonably interferes with a landowner’s right to use and enjoy his or her property. See 

### id. at 935.

Whether agrowth-management plan effects anunconstitutional taking in aparticularinstance is an issue that only acourt may resolve, taking into consideration numerous factual issues. See 

### id. at 932; 

### Estate ofScott, 778 S.W.2d at590. For example, after examining the factual record in

### Estate ofScott, the court determined that the county had not “taken” appellants’ property asamatter oflaw:

[T]he evidence conclusively establishes the following: (1) the sewer moratorium was adopted for alegitimate purpose substantially related to the health, safety, and general welfare of the public; (2) the government’s action inprohibiting additional sewer hookups was not for its own advantage; (3) the regulation was reasonable and not arbitrary; and (4) the sewer moratorium did not render appellants’ land wholly useless nor did it totally destroy the land’s value.

See 

### id.at 591. Such fact-intensive inquiries may not beresolved in an attorney general opinion. See, e.g., Tex. Att’y Gen. Op. Nos. JC-0032 (1999) at 4 (stating that question of fact isbeyond purview of this office); JC-0027 (1999) at 3 (stating the questions of fact cannot be addressed in attorney general opinion); JC-0020 (1999) at 2 (stating that investigation and resolution of fact questions cannot be done in opinion process).

B. Whether a home-rule municipalitv may imolement a growth-management plan that limits the number ofresidential building permits the municipalitv will issue and not the number of nonresidential buildine oermits?
Depending upon the specifics ofthe Town’s growth-management plan orupon itsapplication in aparticular circumstance, agrowth-management plan that limits only the issuance of residential building permits while not limiting the issuance of nonresidential building permits may implicate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. See U.S. CONS. amend. XVI, 5 1. The level of scrutiny with which a court would examine a growthmanagement plan depends upon whether the distinction between residential and nonresidential building permit applications discriminates against a suspect class or impinges upon personal fundamental rights. 

### See Massachusetts Bd. ofRetirement v.Murgia, 427 U.S. 307, 312 (1976); 

### Mayhew, 964 S.W.2d at 939.

Where a suspect class or apersonal fundamental right is not involved, the Equal Protection Clause precludes the government from treating one building permit applicant differently from other similarly situated applicants unless the government has a reasonable basis for doing so. See 

### Massachusetts Bd. ofRetirement, 427 U.S. at 312; 

### Mayhew, 964 S.W.2d at 939. Distinguishing between residential and nonresidential building permit applications does not involve a patently suspect class, so a court probably would determine that this distinction need only be “rationally related to a legitimate state interest.” 

### Mayhew, 964 S.W.2d at 938. This is a relatively lowThe Honorable Bill G. Carter - Page 8 (X-0142)

evident&y standard to meet. A court may find that the Town’s desire to ensure the Town’s “longterm economic health,” FLOWERMOUND,TEXAS,ORDINANCE NO. 2-99, constitutes a legitimate state interest and that restricting residential development is rationally related to this interest.

On the other hand, if a growth-management plan disparately affects a suspect class by, for example, discriminating against applicants on the basis of their racial or ethnic identity, see 

### Massachusetts Bd. OfRetirement, 427 U.S. at 312 n.4 (listing suspect classes), or impinges upon a personal fundamental right, such asthe right to vote or to travel between the states, see 

### id.at 313n.3,
acourt will examine the plan more critically. See 

### id. at 312. Using “strict scrutiny,” the court will ascertain whether the Town has narrowly tailored the plan to serve acompelling state purpose. See Tex. Att’y Gen. Op. No. DM-384 (1996) at 4 (quoting 

### Zoblocki Y.Redhail, 434 U.S. 374 (1978)). Even ifthe plan ispatently neutral, acourt may strictly scrutinize how the plan is applied ifthe court finds that the governing body intended to discriminate. 

### See Schleuter v. City ofFort Worth, 947 S.W.2d 920, 934-35 n.11 (Tex. App.-Fort Worth 1997, writ denied) (Livingston, J., cont. & dissenting) (citing 3RONALD D.ROTUNDA

&JOHNE.NOWAK,TREATISE ONCONSTITUTIONAL

LAW: SUBSTANCE& PROCEDURE5 18.4, at 41-42 (2d ed. 1992)). It is more difficult to sustain an enactment that is subject to strict scrutiny review. Whatever challenges ultimately might bebrought, and the viability of such challenges, obviously will depend on the specifics of the growthmanagement plan.The Honorable Bill G. Carter - Page 9 (X-0142)

SUMMARY

A home-rule municipality may implement a growthmanagement plan that apportions, or “caps,” the number of building permits the municipality will issue in a specified time period even in the absence of an emergency. The municipality must provide appropriate substantive and procedural due process, and the municipality may not attempt to apply its growth-management plan to building permit applications filed prior to the adoption of the plan. See TEX. 

### GOV’TCODEANN. 

### 4 245.002(a), 

### adopted by Act of Apr. 29, 1999, 76th Leg., R.S., ch. 73, 52, sec. 245.002, 1999 Tex. Sess. Law Serv. 431, 432-33. The denial of a building permit application may constitute an unconstitutional taking for which the municipality must compensate the landowner.

A home-rule municipality may adopt a growth-management plan that limits the number ofresidential building permits, and not the number of nonresidential permits, the municipality will issue in a given time period. Depending on the facts of aparticular situation, such agrowth-management plan may implicate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.

Attorney General of Texas

ANDY TAYLOR First Assistant Attorney General

CLARK KENT ERWIN Deputy Attorney General -General Counsel

ELIZABETH ROBINSON Chair, Opinion Committee Kymberly K. Oltrogge Assistant Attorney General - Opinion Committee