Court Opinion

ID: 9680113
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:20:40.516734+00
Date Added: 2024-06-11T18:17:25.621680
License: Public Domain

McGEE, Justice
(dissenting).
I respectfully dissent. I cannot agree with the court’s holding that the LCRA Act is not a legislative limitation upon the power of San Marcos, as a home rule city, to regulate the utility rates charged to its residents.
Section 5 of Article XI of the Texas Constitution, the Home Rule Amendment, provides:
“Cities having more than five thousand (5,000) inhabitants may . . . adopt or amend their charters, subject to such limitations as may be prescribed by the Legislature, and providing that no charter or any ordinance passed under said charter shall contain any provision inconsistent with . . . the general laws enacted by the Legislature of this State-, . . . ” [Emphasis added].
As expansive as the power of a home rule city may be in the absence of legislation, it is clear that the legislature can always limit or withdraw that power by general law." City of Beaumont v. Fall, 116 Tex. 314, 291 S.W. 202 (1927); Dry v. Davidson, 115 S.W.2d 689 (Tex.Civ.App. — Galveston 1938, writ ref’d); City of Baytown v. Angel, 469 S.W.2d 923 (Tex.Civ.App. — Houston [14th Dist.] 1971, writ ref’d n. r. e.). It is not necessary that the general law expressly withdraw the power from the home rule city; it is sufficient if the provisions of the general law are inconsistent with the power remaining in the home rule city. Burch v. City of San Antonio, 518 S.W.2d 540 (Tex.1975); Berry v. City of Fort Worth, 132 Tex. 599, 124 S.W.2d 842 (1939) ; City of Fort Worth v. McDonald, 293 S.W.2d 256 (Tex.Civ.App. — Fort Worth 1956, writ ref’d n. r. e.).
Contrary to the conclusion of the court of civil appeals below, this court has expressly held that the LCRA Act is a general law since it operates upon a subject in which the state at large is interested. Lower Colorado River Authority v. Mc-Craw, 125 Tex. 268, 279-280, 83 S.W.2d 629, 636 (1935). The majority opinion does not suggest otherwise. Therefore, the City of San Marcos cannot possess any power inconsistent with the LCRA Act.
As the court notes, Section 8 of the LCRA Act expressly provides that the LCRA Board of Directors “shall establish and collect rates and other charges for the sale of electric energy . . ..” The court interprets the power to “establish” rates narrowly and concludes that such power does not conflict with San Marcos’ power to “regulate” rates. However, the court ignores the fact that the LCRA is also expressly given the power to “collect” the rates which it has established. Surely when the legislature empowered the LCRA to “establish and collect rates,” it gave the LCRA more power than merely to initially suggest rates which San Marcos may accept or reject. This broad grant of power to the LCRA seems to me to be clearly inconsistent with San Marcos’ re*648taining the right to regulate LCRA rates. The same constitutional provision under which San Marcos derives its general powers to legislate expressly forbids any such action which is “inconsistent with . the general laws enacted by the Legislature of this State.”
The court relies on the proviso that “[n]othing herein shall be construed as depriving the State of Texas of its power to regulate and control fees and/or charges . ” and reasons that since the state reserves the right to regulate rates and since home rule cities can exercise any legislative power not forbidden them, the effect of the proviso is to reserve regulatory power to the home rule cities. This reasoning does not take into account the “well settled rule that statutes are always held to operate prospectively, unless a contrary construction is evidently required by their plain and unequivocal language.” Piedmont & Arlington Life Ins. Co. v. Ray, 50 Tex. 511, 519 (1878); Government Personnel Mut. Life Ins. Co. v. Wear, 151 Tex. 454, 461, 251 S.W.2d 525, 529 (1952). Finding no language in the LCRA Act indicating a legislative intent that the proviso operate retrospectively, I would follow the above rule and hold that it operates prospectively only. Thus, the legislature may, in the future, invoke its reserved power to regulate LCRA rates and either exercise that power itself or delegate that power to any appropriate agency. But until the legislature chooses to activate that reserved power, I find nothing in the proviso indicating an intent to restrict the LCRA’s express power to “establish and collect rates.” Further, the proviso, which reserves to the State of Texas the power to regulate and control LCRA rates and charges, in itself negates the court’s construction that it effectively reserves that power to the home rule cities served by the LCRA. The reservation is to the state and any assumption of such power by the City of San Marcos is inconsistent with such reservation to the state.
There is a further reason why I feel that the legislature did not intend for LCRA rates to be regulated by home rule cities. That is the additional proviso in Section 8 of the LCRA Act that:
“ . . . the State of Texas does hereby pledge to and agree with the purchasers and successive holders of the bonds issued hereunder that the State will not limit or alter the power hereby vested in the District to establish and collect such fees and charges as will produce revenues sufficient to pay [all operating expenses and the interest and principal of all bonds issued].”
We held in Lower Colorado River Authority v. McCraw, supra, that this pledge is a valid method of promoting the marketability of LCRA bonds. The court says that if San Marcos refuses to approve rates sufficient to raise the revenue necessary to keep this pledge “the ordinance will be subject to attack in the courts just as an ordinance regulating the rates of a private utility may be attacked on the ground that it is confiscatory or does not provide a reasonable return.” It is a well known fact in the commercial world that a prospective bond purchaser is hot anxious to buy a potential lawsuit. The court’s construction of Section 8 defeats the very purpose for the legislative pledge and ignores the essential difference between a private utility, which should be regulated since it operates for profit, and the LCRA, which, no less than a home rule city, exists to serve the public and can charge rates no higher than necessary to pay operating costs and retire indebtedness. It raises the unwelcome possibility of the LCRA collecting widely divergent rates for identical service in different cities and incurring additional expenses, with corresponding utility rate increases, in its attempts to justify its rates to various city councils and maintain a revenue level sufficient to fulfill the statutory pledge to bondholders. Again, I cannot believe the legislature intended this result *649when it created the LCRA as a governmental agency and gave it the express power to establish and collect rates sufficient only to maintain its existence.
For the foregoing reasons, I would hold that the LCRA Act, a general law which grants to the LCRA the power to establish and collect rates for electric energy, is inconsistent with any previous authority that San Marcos had to regulate such rates under the general powers vested in it as a home rule city and, therefore, any such previous authority was superseded by the LCRA Act. I would further hold that the LCRA can establish and collect its rates without regulation until the time, if ever, that the legislature decides to exercise its reserved power to regulate such rates.
GREENHILL, C. J., and DANIEL, J., join in this dissent.