Brazos River Authority and the State of Texas v. City of Houston And Sylvester Turner, in His Official Capacity as Mayor of the City of Houston, 03-20-00076-CV

Background

The City of Houston and the Brazos River Authority jointly held Water Appropriation Permit No. 2925 (later reissued/amended as 2925A/2925B) authorizing construction and use of the proposed Allens Creek Reservoir; construction deadlines were imposed (most recently: begin by Sept. 1, 2025).
The Authority acquired the reservoir site; Houston and the Authority entered interlocal agreements and financing arrangements allocating costs and a 70/30 interest split (Houston 70%).
H.B. 2846 (2019) directed Houston to transfer by Jan. 1, 2020, all of its ownership interests in the Allens Creek project, including water-right permits, to the Brazos River Authority and to accept up to $23 million from the Authority.
Houston sued the State and the Authority for declaratory relief, challenging H.B. 2846 on statutory and multiple constitutional grounds; the trial court declared H.B. 2846 unconstitutional and unenforceable.
On appeal, the court held that H.B. 2846 did not conflict with Local Government Code notice and contract provisions (the statute is later and more specific), but that H.B. 2846 is unconstitutionally retroactive because it eliminates Houston’s settled property interest in Permit 2925B while serving only a slight public interest.

Issues

Issue	Plaintiff's Argument (Houston)	Defendant's Argument (State/Authority)	Held
Whether H.B. 2846 violates Local Government Code §§ 272.001 and 552.020	H.B. 2846 requires Houston to execute transfers/contracts contrary to notice and water-supply contract statutes	H.B. 2846 is later and more specific and therefore controls any conflict	Court: H.B. 2846 prevails as later, specific statute; district court erred to invalidate on this ground
Whether H.B. 2846 is unconstitutionally retroactive (Tex. Const. art. I, §16)	The statute retroactively eliminates Houston’s preexisting interest in Permit 2925B	The statute is prospective; Houston had no vested/protected right in unused permit	Court: H.B. 2846 is unconstitutionally retroactive; affirmed trial court on that ground
Whether Houston possessed a constitutionally protected/settled property interest in Permit 2925B	Permit terms, statutory scheme, and surrounding dealings created a settled, protectable interest	Permit is merely an expectation in unused water; no protected right until beneficial use	Court: Houston had a settled, constitutionally protected interest in Permit 2925B
Balance of public interest vs. extent of impairment (Robinson factors)	Impairment is substantial (eliminates 70% interest); legislative record fails to justify retroactive transfer	Legislature acted to advance reservoir construction and natural-resource conservation	Court: Public interest shown was slight; impairment was significant; statute fails Robinson balancing and is unconstitutional retroactively

Key Cases Cited

Robinson v. Crown Cork & Seal Co., 335 S.W.3d 126 (Tex. 2010) (sets forth balancing test for retroactive statutes and displaces rigid "vested-rights" test)
Texas Water Rights Comm’n v. Wright, 464 S.W.2d 642 (Tex. 1971) (recognizes limits on rights in unused water permits and examines retroactive statutes affecting water rights)
Graphic Packaging Corp. v. Hegar, 538 S.W.3d 89 (Tex. 2017) (later-enacted, more specific statute controls over earlier general statute)
Barshop v. Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618 (Tex. 1996) (upheld retroactive groundwater regulation where expectations in resource use were limited)
Tenet Hosps. Ltd. v. Rivera, 445 S.W.3d 698 (Tex. 2014) (definition and analysis of retroactive law)
AEP Texas Cent. Co. v. Arredondo, 612 S.W.3d 289 (Tex. 2020) (summary-judgment standard and de novo review)
Lower Colo. River Auth. v. Texas Dep’t of Water Res., 689 S.W.2d 873 (Tex. 1984) (water-use principle: no right to waste by nonuse)