Court Opinion

ID: 2866084
Source: CourtListenerOpinion
Date Created: 2015-09-06 01:34:46.652397+00
Date Added: 2024-06-11T12:44:24.799701
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-03-00143-CV

  Chocolate Bayou Water Company and Sand Supply, A Division of Campbell Concrete
                          and Materials, L.P., Appellants

                                                 v.

Texas Natural Resource Conservation Commission; City of Houston, Texas; Brazos River
              Authority; and Texas Water Development Board, Appellees

     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
           NO. GN201029, HONORABLE PAUL DAVIS, JUDGE PRESIDING

                                          OPINION

               Appellants, Chocolate Bayou Water Company and Sand Supply appeal a district-court

grant of a plea to the jurisdiction, and in the alternative, summary judgment, dismissing their suit

against appellees, the Texas Natural Resource Conservation Commission,1 the City of Houston, the

Brazos River Authority, and the Texas Water Development Board (“TWDB”) (collectively

“TCEQ”). Appellants’ central complaint is that TCEQ issued a defective notice concerning the

       1
          By statute effective September 1, 2001, the legislature changed the name of the Texas
Natural Resource Conservation Commission to the Texas Commission on Environmental Quality,
to be effective January 1, 2004. The statute granted the TNRCC authority to adopt a timetable for
phasing in the change of the agency’s name, so that until January 1, 2004, the agency may perform
any act authorized by law under either title. See Act of April 20, 2001, 77th Leg., R.S., ch. 965,
§ 18.01, 2001 Tex. Gen. Laws 1985. On September 1, 2002, the agency began using its new name,
while continuing to recognize the former. We will refer to the agency as TCEQ.
amendment application to the reissued Allens Creek water permit that prevented appellants from

timely requesting a contested-case hearing on the amendment application. Appellants contend that

the notice of the application was defective because general language in the notice differed from the

amended permit the Commission actually granted. Appellants have also alleged: (1) Senate Bill

1593, which authorized the Allens Creek permit and its amendment, is unconstitutional as a

“special” or “local” law; (2) Senate Bill 1593 violated appellants’ due process rights by authorizing

TCEQ to issue TWDB this permit without notice or hearing; and (3) the amended permit infringes

appellants’ senior water rights in violation of the Texas Water Code. TCEQ filed a plea to the

jurisdiction. In addition, both appellants and TCEQ filed motions for summary judgment. The

district court granted TCEQ’s plea to the jurisdiction and in the alternative, also granted TCEQ’s

summary judgment. We will affirm.

                                         BACKGROUND

               The first Allens Creek permit was issued to Houston Lighting & Power in 1974 for

the purpose of providing a cooling reservoir for a proposed power plant. The power plant was never

built, and the permit was canceled ten years later at the request of Houston Lighting & Power. In

1999, the Texas legislature passed Senate Bill 1593 (“S.B. 1593”), a comprehensive water plan that

contained a provision that specifically required TCEQ, the state agency charged with managing water

permitting, to reissue the Allens Creek permit to TWDB for the purpose of supplying Houston with

municipal water. Because the reissued permit retained all the provisions of the first permit but was

intended for a different purpose, the bill also provided that the reissued permit could be amended and

that the amendment application would have to meet the notice and hearing requirements of the water

                                                  2
code. Further, S.B. 1593 allowed TWDB to transfer the Allens Creek permit to another political

subdivision. TWDB has since shared its permit with the Brazos River Authority and the City of

Houston.

               TWDB filed an application to amend the Allens Creek permit in June 2000. Senior

water-right holders, those that hold permits predating the Allens Creek reissued permit, were mailed

a notice of the application. Both Chocolate Bayou and Sand Supply hold water rights senior to

TWDB’s Allens Creek permit; both were duly given notice of the amendment application. The

notice met the sparse statutory requirements of the water code and further indicated that the amended

Allens Creek permit would contain stream flow restrictions measured at the Richmond gage that

would “safeguard downstream water rights.” See Tex. Water Code. Ann. § 11.132 (West 2000).

Stream flow restrictions are one method that TCEQ uses to protect senior water rights. TCEQ may

assign a permitee a stream flow restriction. When the river flows below that specified number, the

permitee can no longer divert water from the river. Thus, a low stream flow restriction allows the

permitee to divert more water than a high restriction. Allens Creek is located upstream from

Chocolate Bayou and Sand Supply on the Brazos River.

               Chocolate Bayou was sent a copy of the application for amendment along with the

notice. Sand Supply stated at oral argument that they did not get a copy of the application until much

later.2 Because the application is a sparse and highly technical document, TCEQ requested, and

TWDB filed, more detailed supporting materials along with its application. Both the application and

       2
         TCEQ is not statutorily mandated to send the application with the notice. See Tex. Water
Code. Ann. § 11.132 (West 2000). The application, however, is on file with TCEQ and is available
to the public. Neither appellant contests that it was given access to the permit application and
supporting materials.

                                                  3
supporting materials were on file and open to review by the public. Once the application for

amendment was filed, the Brazos River Authority, co-holder of the Allens Creek permit, conducted

a series of “road shows” wherein they discussed the amendment they were seeking with senior water-

right holders. Appellants contend that during these meetings, the Brazos River Authority described

the Allens Creek permit as a “scalping operation” that would only divert water from the Brazos River

during high-water periods.

               In March 2001, appellants obtained copies of the draft amended permit. At that time

the permit had not yet been formally adopted. The amended permit contained stream flow

restrictions measured at a gage over thirty miles upstream from the Richmond gage, a location much

closer to the actual diversion point of the Allens Creek permit. It also specified stream flow

restrictions that both appellants now claim impair their senior water rights. After receiving its copy

of the draft amended permit, Chocolate Bayou filed a request for an evidentiary hearing with TCEQ.

In May 2001, Sand Supply requested a formal contested-case hearing regarding the amended permit.

However, neither appellant could request a contested-case hearing at that time because the timetable

for contested-case filings had elapsed.3 Both appellants filed several requests for rehearing over the

following months. Each request was denied by the Commission. On January 16, 2002, TCEQ

formally granted the amended Allens Creek permit.

               Appellants filed suit for judicial review in district court. Appellants’ main complaint

is that the notice of amendment TCEQ issued to senior water-right holders was defective because

       3
         The contested-case hearing timetable allows the commission to act on an application thirty
days after the publication of notice if no claimant has requested a contested-case hearing. See Tex.
Water Code. Ann. §11.132 (d). Appellants concede that their request for a contested-case hearing
was not timely.

                                                  4
it differed materially from the amended permit that TCEQ ultimately granted, and appellants’

reliance on the defective notice prevented them from filing for a contested-case proceeding regarding

the Allens Creek permit amendment thereby depriving them of due process. In their district court

lawsuit, appellants complained for the first time that the original permit issued pursuant to S.B. 1593

was unconstitutional because S.B. 1593 is an impermissible “local law” and because the legislature

required TCEQ to issue the Allens Creek permit without notice or hearing. Appellants also claimed

that TCEQ had acted unlawfully by issuing the amended Allens Creek permit in the face of

appellants’ protests. The district court dismissed appellants’ claims pursuant to TCEQ’s plea to the

jurisdiction and in the alternative granted TCEQ summary judgment.

                                    STANDARD OF REVIEW

                Subject-matter jurisdiction is essential to the authority of a court to decide a case.

Rylander v. Caldwell, 23 S.W.3d 132, 135 (Tex. App.—Austin 2000, no pet.) (citing Texas Ass’n

of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443 (Tex.1993)). “A plea to the jurisdiction

challenges the trial court’s authority to determine the subject matter of a specific cause of action.”

Id. (citing Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm’n, 16 S.W.3d

61, 65 (Tex. App.—Austin 2000, no pet.)). In order to prevail, the party asserting the plea to the

jurisdiction must show that even if all the allegations in the plaintiff’s pleadings are taken as true,

there is an incurable jurisdictional defect apparent from the face of the pleadings, rendering it

impossible for the plaintiff’s petition to confer jurisdiction on the trial court. See id.

                Because subject-matter jurisdiction presents a question of law, we review the district

court’s decision de novo. Id. In reviewing a trial court’s ruling on a plea to the jurisdiction, we do

                                                   5
not look at the merits of the case; rather, we “construe the pleadings in favor of the plaintiff,” look

to the pleader’s intent, and accept the pleadings’ factual allegations as true. Id.

               The district court also granted TCEQ’s summary judgment in the event that its grant

of TCEQ’s plea to the jurisdiction was inappropriate. Because the propriety of a summary judgment

is also a question of law, we review the district court’s decision de novo. Natividad v. Alexsis, Inc.,

875 S.W.2d 695, 699 (Tex. 1994); Texas Dep’t of Ins. v. American Home Assurance Co., 998

S.W.2d 344, 347 (Tex. App.—Austin 1999, no pet.). The standards for reviewing a motion for

summary judgment are well established: (1) the movant for summary judgment has the burden of

showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter

of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment,

evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must

be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Prop.

Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

                                           DISCUSSION

               Appellants’ main issue in this appeal is (1) that TCEQ issued a defective notice of

application that prevented them from filing for a contested-case hearing. They have also raised the

following issues: (2) S.B. 1593 is unconstitutional as a “local law” and therefore, the original and

amended Allens Creek permit, issued pursuant to S.B. 1593, are void; (3) S.B. 1593 violates

appellants’ due process rights by commanding the TCEQ to issue a permit without a notice or

hearing; (4) contested-case filing deadlines are tolled until a proper notice is issued; (5) appellants

have in fact exhausted their post-contested-case administrative remedies; and thus, TCEQ improperly

                                                  6
refused appellants’ requests for a hearing after the amended permit had been issued; (6) the

Executive Director of the TCEQ did not have authority to issue the amendment to the Allens Creek

permit because the amendment was not “uncontested;” (7) the Allens Creek amended permit violates

provisions set out in S.B. 1593; and (8) based on a substantial-evidence review, the TCEQ issued

the Allens Creek permit amendment in violation of the water code due to the fact that the amendment

impermissibly injures senior water-right holders.

“Defective” notice

               Appellants’ central complaint in this case is that TCEQ violated their due process

rights by issuing a defective notice regarding the Allens Creek amendment application. We

conclude that the Allens Creek amendment notice was not defective as it applied to appellants.

               The United States Supreme Court has stated: “An elementary and fundamental

requirement of due process in any proceeding which is to be accorded finality is notice reasonably

calculated, under all the circumstances, to apprise interested parties of the pendency of the action and

afford them an opportunity to present their objections.” Armstrong v. Manzo, 380 U.S. 545, 550

(1965) (quoting Mullance v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)). “The notice

must be of such nature as reasonably to convey the required information.” Mullance, 339 U.S. at

314. This Court has noted in the TCEQ application context that the applicant must provide the

public with notice of its application. United Copper Indus., Inc. v. Grissom, 17 S.W.3d 797, 802

(Tex. App.—Austin 2000, pet. dism’d as moot). This requirement affords individuals who may be

affected by the grant or denial of the permit a meaningful opportunity to voice their concerns and

                                                   7
participate in the permitting process by requesting a contested-case hearing on the permit application.

Id.

                Although appellants admit they received timely notice of the amendment application,

they complain that the notice they received differed materially from the permit TCEQ ultimately

granted. They pose, in essence, a “bait and switch” argument. Appellants point out that the notice

stated that the amended permit would include monthly flow requirements at the Richmond gage to

safeguard downstream water rights.         The granted permit, however, included monthly flow

restrictions at a gaging station over thirty miles upstream from the Richmond gage that appellants

contend do not protect downstream water-right holders. They assert that because they were content

with the provisions of the amendment outlined in the notice, they did not file for a contested-case

hearing. They argue that it is unfair to refuse them a hearing now, after the amended permit was

granted, in light of the fact that the amended permit differed materially from the notice they received.

                Although appellants have framed their case in a compelling manner, we reject it. The

amended permit does vary from the notice and the application. In some ways the amended permit

places a greater burden on appellants and in some ways it benefits them. Our task, however, is not

to analyze these differences, but to determine whether appellants had sufficient notice that their

interests were at risk. If appellants had notice that their interests were at risk, the appropriate method

for addressing those concerns would have been through the normal administrative process of a

contested-case hearing.

                We note first that appellants’ reliance on the information set forth in the notice itself

is misplaced. The title of the notice is “Notice of Application,” as such the notice serves as notice

                                                    8
that an application for a permit or an amendment to a permit has been filed. The water code requires

notice of an application to include the name and address of the applicant, the date the application was

filed, the purpose and extent of the proposed appropriation of water, identify the source of supply

and where the water is to be stored, specify the time and place that the application is going to be

discussed, and give any other information the Commission deems necessary. See Tex. Water Code.

Ann. §11.123 (West 2000). It is clear from the limited amount of information that must be included

in a notice statement that the notice itself is not intended to fully apprise potentially affected parties

of the specifics of the proposed permit. Those specifics are found in the application and its

supplemental materials, all of which are available to the public.

                In Sand Supply’s case, the terms of the notice itself alerted them, or should have, that

their water-right interests were at risk. Sand Supply’s permit is governed by a stream flow restriction

of 1,130 cfs measured at the Richmond gage for several months of the year. The notice indicates that

the Allens Creek permitee would only be required to release its reservoir waters when the Richmond

gage indicated that stream flows had dipped below 1,100 cfs. Furthermore, the amendment

application and supporting materials, to which Sand Supply had access, definitely specified certain

stream flow restrictions that undoubtedly put Sand Supply on notice that they would need to file for

a contested-case hearing in order to protect their interests. Although the amendment notice stated

in a general way that senior water-right holders would be protected by monthly stream flow

restrictions measured at the Richmond gage, the application and its supporting materials specified

flow rate restrictions that are in some cases several hundred cubic feet per second below Sand

Supply’s stream flow restrictions measured at the same gage. Sand Supply cannot rely on a general

                                                    9
statement in the application notice when it had full access to the facts detailed in the application and

its supporting materials. Therefore, in Sand Supply’s case, although the notice and application

differed from the granted amendment, Sand Supply was on notice that the amendment as outlined

in the application and supporting materials would adversely affect it. Under the facts presented here,

we conclude that Sand Supply was given “notice reasonably calculated, under all the circumstances,

to apprise interested parties of the pendency of the action and afford them an opportunity to present

their objections.” Manzo, 380 U.S. at 550. Sand Supply’s failure to take advantage of that

opportunity constituted a waiver of its administrative rights.

               As to Chocolate Bayou, although Chocolate Bayou’s stream flow restriction is not

measured at the Richmond gage and thus the number differentials are not as clear, Chocolate

Bayou’s own expert indicated in his affidavit to the district court that Chocolate Bayou’s water right

would be protected only if the Allens Creek permit contained stream flow conditions far in excess

of what the application and its supporting materials proposed. Therefore, Chocolate Bayou was put

on notice by the application and its supporting materials, to which they had access, that its water-

right interests were in jeopardy and yet failed to request a contested-case hearing. Thus, under these

facts, we conclude that appellants are attempting to use the differences between the amendment

application and the amended permit to launch an impermissible collateral attack on TCEQ’s final

order. Because appellants received notice that adequately apprised them that their water-right

interests were at risk, appellants’ concerns about the amendment should have been brought through

a contested-case hearing. We overrule appellants’ first issue.

                                                  10
Local law and due process claims

                Appellants assert that S.B. 1593 is unconstitutional (1) because it is a “local law” that

specifically required TCEQ to issue the Allens Creek permit by name and (2) because it required

TCEQ to issue the Allens Creek permit without notice or hearing. TCEQ responds that appellants

do not have standing to bring these claims because they did not exhaust their administrative remedies

and therefore these claims merely operate as collateral attacks on the Commission’s final order.

Appellants respond that their claims contesting S.B. 1593 are not impermissible collateral attacks

because, if in fact S.B. 1593 is an unconstitutional law, then the original Allens Creek permit is void;

and therefore, they conclude, the amended Allens Creek is also void. We conclude that appellants’

claims against S.B. 1593 are impermissibly collateral.

                It is well settled that a party must exhaust its administrative remedies before seeking

judicial review of an agency decision. See Tex. Gov’t Code Ann. § 2001.171 (West 2000); see also

Wilmer-Hutchins Indep. Sch. Dist. v. Sullivan, 51 S.W.3d 293, 294-95 (Tex. 2001). This Court has

held that the requirement of seeking a remedy with the administrative agency is jurisdictional rather

than a matter going solely to a plaintiff’s right to relief. See Hill v. Board of Trs., Ret. Sys., 40

S.W.3d 676, 678 (Tex. App.—Austin 2001, no pet.). Appellants contend that the exhaustion

doctrine does not control this case because certain exceptions apply. They argue that they should

not be required to exhaust their administrative remedies when their challenge of agency action is

based on questions of law. See Grounds v. Tolar Indep. Sch. Dist., 707 S.W.2d 889, 892 (Tex.

1986). They further contend that the doctrine of exhaustion of remedies does not apply to their

constitutional claims because the Commission does not have exclusive jurisdiction to decide whether

                                                   11
S.B. 1593 is constitutional, in fact it has no jurisdiction to decide such a claim. See Butnaru v. Ford,

84 S.W.3d 198, 207-08 (Tex. 2002); see also Texas State Bd. of Pharmacy v. Walgreen Tex. Co.,

520 S.W.2d (Tex. App.—Austin 1975, writ ref’d n.r.e).

                TCEQ responds that, notwithstanding these exceptions, appellants’ suits were filed

after TCEQ’s issuance of the amended permit, which constitutes a final order, and therefore these

exceptions do not control. TCEQ urges this Court to apply our holding in Friends of Canyon Lake,

Inc. v. Guadalupe-Blanco River Authority—that in circumstances wherein the plaintiff neglected to

bring any challenges to a state agency’s action until after the final order was issued, the district court

could not properly hear the plaintiff’s claims because the claims were collateral attacks on the agency

action. 96 S.W.3d 519 (Tex. App.—Austin 2002, pet. denied). We agree with TCEQ’s argument.

                In this case, where the dispute focuses on issuance of an amendment after a lengthy

administrative process, these exceptions to the exhaustion doctrine could only have been invoked

if appellants had sought judicial relief before the final agency order. For example, in Yamaha v.

Motor Vehicle Div., 860 S.W.2d 223 (Tex. App.—Austin 1993, writ denied), the plaintiff, for the

first time in its judicial review action in court, challenged an order issued by the Texas Motor

Vehicle Commission partly on the grounds that the Commission had exceeded its statutory authority.

This Court rejected the challenge because Yamaha failed to assert such an argument before the final

order was issued:

        We recognize that in certain limited circumstances, e.g., when an agency acts outside
        its constitutional or statutory authority, a party may challenge the agency’s action
        independent of the procedural requirements imposed by APTRA in a statutory suit
        for judicial review. . . . This exception, however, allows a party to challenge the
        agency’s action prior to the rendition of a final order.

                                                   12
Id. at 229 (citations omitted).

               In this case, S.B. 1593 allowed the old Houston Lighting & Power permit to be

reissued to TWDB in 1999, yet appellants did not complain about the bill until after TCEQ granted

the amended permit in 2002 when it filed suit in district court. The present facts are substantially

analogous to those in Friends. See Friends, 96 S.W.3d 519. In Friends, the plaintiffs asserted that

the agency that applied for an amendment to its water permit had done so in violation of the open

meetings act. Id. After the Commission had granted the amended permit, the plaintiffs filed suit

alleging an open meetings violation. Id. We concluded that there had not been an open meetings

act violation; however, we went on to question how the propriety of the other agency’s actions could

have affected a duly granted permit. Id. at 532. Even if the application had been sent to the

Commission in violation of the open meetings act, the Commission passed it properly. Id.

Therefore, we concluded that even if we had found the application in violation of the open meetings

act, we could not have voided the permit. Id. Although, as appellants argue, their claims deal with

the constitutionality of a bill and not the propriety of an agency action, the end result is the same.

Even if the original Allens Creek permit was granted pursuant to an improper legislative enactment,

the Commission properly granted the amended permit. Collateral attacks upon an agency order may

be maintained successfully on one ground alone—that the order is void. Lesikar v. Rappeport, 33

S.W.3d 282, 316 (Tex. App.—Texarkana 2000, pet. denied) (citing Gulf States Utils. Co. v.

Coalition of Cities for Affordable Util. Rates, 883 S.W.2d 739, 758 (Tex. App.—Austin 1994)

(Powers, J., dissenting), rev’d on other grounds, 947 S.W.2d 887 (Tex.1997)). An agency order may

be void in the requisite sense on either of two grounds: 1) the order shows on its face that the agency

                                                  13
exceeded its authority, or 2) a complainant shows that the order was procured by extrinsic fraud. Id.

As to the amended permit, neither of those conditions are met. Therefore, at this juncture, any

analysis by this court on the constitutionality of S.B. 1593 would merely serve as an impermissible

advisory opinion because, rather than remedying actual harm, it would address only a hypothetical

injury. See Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). We

conclude that appellants’ attacks on S.B. 1593 are impermissible collateral attacks against a final

agency order. We therefore overrule appellants’ second and third issues.

Post-contested-case administrative remedies

               Appellants assert4 that they have in fact exhausted their post-contested-case

administrative remedies, and thus this Court should review TCEQ’s refusal to grant an extension for

rehearing. Administrative remedies must be exhausted before a district court may hear the issue as

a jurisdictional matter. See Hill, 40 S.W.3d at 678. Appellants failed to timely request a contested-

case hearing. Appellants, however, argue that they have exhausted their administrative remedies

through their filings for rehearing. The Texas Administrative Code states: “A motion for rehearing

is a prerequisite to appeal.” 30 Tex. Admin. Code Ann. § 80.271 (2003). As appellants have filed

for rehearing and thus exhausted available administrative remedies with regard to post-contested-

case filings, we will determine whether TCEQ appropriately denied appellants’ extension filings,

appropriately refused to place appellants’ objections on the Commission docket, and ultimately

properly refused to grant a hearing.

       4
           Appellants also asserted in their fourth issue that if the notice of the amendment is
defective, contested-case filing deadlines are tolled until a proper notice is issued. Because this
Court has not concluded that appellants’ notice was defective, we overrule appellants’ fourth issue.

                                                 14
               Appellants claim that TCEQ abused its discretion by refusing appellants’ requests for

a filing-extension, by refusing to place their objections on the Commission docket, and ultimately

by refusing to grant appellants a hearing. TCEQ is afforded the option of granting extended time

limits for the filing of motions. See 30 Tex. Admin. Code Ann. § 80.272 (2003). Appellants

specifically complain that TCEQ has allowed extensions in the past, that TCEQ has unpublished

guidelines by which it determines whether or not to grant extensions, and that TCEQ is acting

arbitrarily by denying appellants’ requests. Appellants rely on United Copper Indus., Inc. v.

Grissom, 17 S.W.3d 797, 805 (Tex. App.—Austin 2000, dism’d as moot), to support their contention

that TCEQ cannot rely on guidelines that it does not publish. However, Grissom involved TCEQ

refusing a hearing because evidence was not submitted with the timely-filed hearing request. Id.

Neither the notice in that case nor the agency’s published rules required such evidence to be

submitted concurrently with the request for hearing. Id.

               The factual underpinnings of Grissom are quite different from the present case. See

id. Appellants did not timely request a hearing. The notice and the agency rules are definitive on

filing deadlines. TCEQ is not required to grant extensions at all. TCEQ stated in a letter to

appellants that it was its policy not to grant filing extensions unless the extension filings were made

by the filing deadline or as a result of a natural disaster, such as a hurricane. TCEQ was not required

to provide an explanation of its denial. These are internal guidelines by which TCEQ exercises its

statutory discretion and are reasonable. The other two complaints by appellants—that TCEQ erred

by not including appellants’ objections on the Commission docket and refusing to grant them a

                                                  15
hearing—are by-products of TCEQ’s refusal to grant appellants an extension. We conclude that

TCEQ did not abuse its discretion on the facts presented here. We overrule appellants’ fifth issue.

Executive Director’s authority

               Appellants next claim that the Executive Director of TCEQ did not have authority

to issue the amendment to the Allens Creek permit because the amendment was not “uncontested.”

The Texas Water Code provides for the delegation of uncontested matters to the Executive Director

of the Commission. See Tex. Water Code Ann § 5.122 (West 2000). Agency rules provide that such

action is appropriate provided that:

       (1) public notice requirements have been satisfied and the executive director has
           considered the public comment and filed a response;

       (2) the application meets all the relevant statutory and administrative criteria;

       (3) the application does not raise new issues that require interpretation of
           commission policy;

       (4) the executive director’s staff and public interest counsel do not raise objections;
           and

       (5) the application is uncontested because: (A) no timely requests for
           reconsideration or contested case hearing are filed with the clerk; (B) the
           applicant and persons who timely filed requests for reconsideration or contested
           case hearing have agreed in writing to the action to be taken by the executive
           director; (C) any timely requests for reconsideration or contested case hearing
           have been withdrawn or have been denied; (D) a settlement was reached in a
           contested case hearing, and the application has been remanded from SOAH; or
           (E) a contested case hearing has been filed but no opportunity for hearing is
           provided by law.

30 Tex. Admin. Code § 50.133 (2002).

                                                 16
               Appellants argue that the Executive Director was not authorized to grant the Allens

Creek amendment because none of the aforementioned provisions were met. We disagree because:

(1) as we have discussed above, appellants received proper notice and appellants have not shown that

the Executive Director did not consider or respond to public comment that was timely made; (2) the

application does meet statutory guidelines—including the protection of senior water-right holders

(issue discussed below); (3) even though this amendment was pursuant to a “first of its kind”

reissued permit, the amendment process and the issues involved are not “new issues that required

interpretation of commission policy;” (4) although the Public Interest Counsel of TCEQ did lodge

an objection to the amendment notice—in response to appellants’ motions for rehearing—it did not

do so until after the Executive Director granted the amendment; and (5) the application was not

under timely protest at the time the Executive Director granted the permit. Each of the provisions

limiting when an Executive Director may act are time-sensitive. Although the amendment was

contested by appellants, their protests were not timely and thus the Executive Director was not

precluded from acting when he did. We overrule appellants’ sixth issue.

Appropriate review of the Allens Creek amended permit

               Appellants also argue (1) that provisions of S.B. 1593 outline specific

protections—stream flow restrictions—for senior water-right holders which were not included in the

amended Allens Creek permit and (2) that, based on a substantial-evidence review, TCEQ issued the

Allens Creek permit amendment in violation of the water code due to the fact that the amendment

impermissibly injures senior water-right holders. This Court may not properly review appellants’

complaints because they were not first brought in a contested-case hearing. See Tex. Gov’t Code

                                                17
Ann. § 2001.171; Hill, 40 S.W.3d at 678. As we have concluded above, appellants were on notice

that the Allens Creek amendment application requested terms that arguably could adversely affect

appellants’ interests. The application and supporting materials indicated that, instead of using strict

stream flow restrictions, the amended permit would protect senior water-right holders by instituting

“call” provisions wherein a senior right-holder may call the Allens Creek permitee to compel it to

release water from the Allens Creek reservoir in order to bring the Brazos water level back up to a

level that would allow senior water-right holders to divert water pursuant to their permits. Although

these provisions may be onerous for appellants, it is not clear that they detract from their legal right

to a specified amount of water. How a senior water-right holder’s water right will be protected in

practice is exactly the kind of issue that should be brought in a contested-case hearing. Appellants

waived the issue by not requesting a contested-case at the appropriate time. We overrule appellants’

seventh and eighth issues.

                                          CONCLUSION

               Having overruled all appellants’ issues, we affirm the judgment of the district court.

                                               W. Kenneth Law, Chief Justice

Before Chief Justice Law, Justices Kidd and Puryear

Affirmed

Filed: December 18, 2003

                                                  18