Opinion ID: 895256
Heading Depth: 1
Heading Rank: 2

Heading: An Overview of Water Management in Texas

Text: Texas' first venture into water regulation stemmed from the state's need to irrigate its driest regions. See generally F. Joyce Cox, The Texas Board of Water Engineers, 7 TEX. L.REV. 86, 86 (1928-1929) (In Texas, as elsewhere, administrative control of water resources came in answer to a need.). In 1889, the Legislature enacted a bill for the arid districts of Texas. See Act of March 19, 1889, 21st Leg., ch. 88, 1889 Tex. Gen. Laws 100, 100. The goal was to charter corporations that would build an infrastructure to furnish water to all persons ... for irrigation and domestic uses. Id.; see also Ward County Irrigation Dist. No. 1 v. Red Bluff Water Power Control Dist., 170 S.W.3d 696, 700 (Tex.App.-El Paso 2005, no pet.). Fifteen years later, Texans approved a constitutional amendment permitting local governments to issue bonds for water development. TEX. CONST. art. III, § 52(b)(2). Texas voters ratified another water-related amendment in 1917. See TEX. CONST. art. XVI, § 59. The amendment created conservation and reclamation districts as units of local government, and made the preservation of natural resources a public right and duty. Id. § 59(a), (b); see also Dallas County Levee Dist. No. 2 v. Looney, 109 Tex. 326, 207 S.W. 310, 310 (1918). As with prior amendments, financing was instrumental to water-resource management. In that respect, the amendment permitted all such indebtedness as may be necessary to provide all improvements and the maintenance thereof requisite to the achievement of the purposes of this amendment, as long as such proposition shall first be submitted to the qualified ... voters of such district and the proposition adopted. TEX. CONST. art. XVI, § 59(c). Along with the development of conservation districts came the Legislature's codification of state water law. See TEX. WATER CODE § 1.003 (declaring the public policy of the state to provide for the conservation and development of the state's natural resources). Chapters 49 and 51 of the Water Code govern water control and improvement districts (WCIDs), like Clear Lake City Water Authority. Chapter 49 provides a blueprint for creating and operating general law water districts, and for financing the significant work required to conserve water resources. See id. § 49.211(b). Chapter 51 deals with WCIDs. See id. § 51.121. WCIDs have broad authority to supply and store water for domestic, commercial, and industrial use; to operate sanitary wastewater systems; and to provide irrigation, drainage, and water quality services. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, TEXAS WATER DISTRICTS: A GENERAL GUIDE 2 (2004), available at http://www.tceq.state.tx.us/files/gi-043.pdf_4419598.pdf (all Internet materials as visited August 25, 2010 and available in Clerk of Court's file). WCIDs are one of thirteen different types of general law water districts acting as state political subdivisions. See TEX. WATER CODE § 50-68; Bonnie M. Stepleton, Note, Texas Groundwater Legislation: Conservation of Groundwater or Drought by Process, 26 NAT. RESOURCES J. 871, 874 (1986). WCIDs may consist of a single county or multiple counties. See Dick Smith, Water Control and Improvement Districts, 6 THE NEW HANDBOOK OF TEXAS 840 (1996). Because WCIDs have extensive power to regulate domestic and commercial water supply, they have become the main financing mechanism for development in urban areas. Stepleton, 26 NAT. RESOURCES J. at 875.
The Clear Lake City Water Authority was created in 1963. See Act of May 6, 1963, 58th Leg., H.B. No. 1003, R.S., ch. 101, 1963 Tex. Gen. Laws 164, 173. The Authority occupies the Clear Lake area in Harris County, approximately 20 miles southeast of downtown Houston. CLEAR LAKE CITY WATER AUTHORITY, GENERAL INFORMATION (2010), http://clcwa.org/generalinfo.htm. It is currently Texas' largest water district, encompassing over 16,000 acres, with around 84,000 residents. Id. Water districts frequently contract with private developers to build and maintain water facilities. Prefunding agreements, like the ones at issue here, are governed by the Texas Commission on Environmental Quality's (TCEQ) rules. See Malcomson Rd. Util. Dist. v. Newsom, 171 S.W.3d 257, 274 n. 11 (Tex.App.-Houston [1st Dist.] 2005, pet. denied); 30 TEX. ADMIN. CODE § 293.46. These agreements allow developers to finance facilities contemplated for purchase by the district before TCEQ has approved the bond issue, provided certain conditions are met. 30 TEX. ADMIN. CODE § 293.46. The TCEQ rules require developers to pay at least 30% of the costs under such contracts, to insure the feasibility of the construction projects of such districts. 30 TEX. ADMIN. CODE § 293.47. The rules further provide that [a] person proceeding with construction of a project prior to its formal approval by the commission shall do so with no assurance that public funds will be authorized for acquiring the facilities. Id. § 293.46(6). Thus, the developer who builds the infrastructure assumes the risk that funding will never materialize, and voters determine whether to commit funds for the project. We turn now to the issues before us.