                                                  KEN PAXTON
                                            ATTORNEY GENERAL OF TEXAS



                                                  February 22, 2017



The Honorable J.D. Sheffield                                  Opinion No. KP-0133
Chair, Joint Committee on Aging
Texas House of Representatives                                 Re: Whether the proposed Upper San Saba
Post Office Box 2910                                           River Management Plan unlawfully delegates
Austin, Texas 78768-2910                                       legislative power to a private entity
                                                               (RQ-0124-KP)

Dear Representative Sheffield:

        You ask about the constitutionality of a management plan (the "Plan") for the upper
San Saba River proposed by a group of water rights holders and others. 1 According to its terms,
the Plan's primary purpose would be to "provid[e] flows downstream of Menard County in the
summer months during times of drought, while minimizing, to the extent possible ... negative
impact on upstream users." Attachment at 2. To achieve this, the Plan would create a board that
the Legislature would authorize to issue orders to curtail the use of water when certain conditions
are met. See id at 3-7. The members of the board would include private landowners and other
specific persons appointed by each of the co'unty judges in the affected counties, as well as "[a]
representative from [the Texas Commission on Environmental Quality], a hydrologist, and all
groundwater and/or underground water district managers in the four-county management area."
Id. at 3. 2 Your concerns arise from whether "the Legislature empowering a 'private board' to
regulate all diversions from the Upper San Saba River" is an improper delegation of authority.
Request Letter at 3. 3 Specifically, yo,u ask whether "the adoption of the Plan, and legislative action


         1
        See Letter and Attachment from Honorable J.D. Sheffield, Chair, Joint Comm. on Aging, Tex. House of
Reps., to Honorable Ken Paxton, Tex .. Att'y Gen. at I (received Aug. 26, 2016), https://
www.texasattomeygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter" and "Attachment" respectively)
(Attachment on file with the Op. Comm.).

         2
           According to the Plan you submitted, the Schleicher County Judge would appoint "[two] groundwater
irrigators from eastern Schleicher County"; the Menard County Judge would appoint"[ one] member of [the] Menard
Irrigation Company Board of Directors, [one] landowner with adjudicated rights[, and the] manager of Menard County
Water Control and Improvement District No. I"; the Mason County Judge would appoint "[two] landowners with
riparian [domestic and livestock] rights"; and the McCulloch County Judge would appoint "[two] landowners with
adjudicated water rights and/or riparian [domestic and livestock] rights." Attachment at 3.

         3 You do not ask, and we do not opine on, whether the board in question is, in fact, a private entity for purposes
of delegation analysis. But "courts have universally treated a delegation as private where interested groups have been
The Honorable J.D. Sheffield - Page 2                  (KP-0133)



to incorporate the same by statute [would] constitute an unconstitutional delegation of legislative
and executive authority infringing on the separation of powers." Id. at 1. You also ask whether
the Plan would "effect a taking of constitutionally and statutorily protected rights of riparian
landowners along the Upper San Saba River segment to the flows in the river." Id.

        At the outset, we note our receipt of briefing. informing us that the Plan has been updated
in response to concerns expressed at public meetings and is not finalized. 4 According to the
updated version of the Plan as submitted to this office ("Updated Plan"), the Commission would
delegate its authority not to a private entity but to a board which the Legislature would designate
as "a local governmental entity and agent of the [Commission]." 5 Brief Enclosure at 2. Assessing
the constitutionality of a plan that is in a state of flux creates inherent difficulty, and you have
asked about only the earlier version of the Plan. Whether a particular waterway management plan
involves an improper delegation of authority or results in an unconstitutional taking will likely
involve multiple factual inquiries that cannot be resolved in an attorney general opinion. See Tex.
Att'y Gen. Op. No. KP-0099 (2016) at 3 (noting that abstract factual determinations are "not
appropriate for the opinion process"). However, we can offer general guidance regarding the
delegation of legislative power as it exists in both Plans and the analysis courts use to assess a
takings claim.

         We begin with the delegation of legislative power. "The Texas Constitution vests
'legislative power' in the Legislature." FM Props. Operating Co. v. City of Austin, 22 S.W.3d
868, 873 (Tex. 2000) (quoting TEX. CONST. art. III,§ 1) (creating the legislative department); see
also TEX. CONST. art. II, § 1 (establishing separation of powers among the legislative, executive,
and judicial departments). Legislative power, which the courts define broadly, "includes the power
to set public policy. In addition, it includes many functions that have administrative aspects,
including the power to provide the details of the law, to promulgate rules and regulations to apply
the law, and to ascertain conditions upon which existing laws may operate." FM Props., 22 S. W.3d
at 873 (citations omitted). The Texas Supreme Court has long recognized that "because a
legislative body would be hard pressed to contend with every detail involved in carrying out
applicable laws, delegation of some legislative power is both necessary and proper." Tex.
Workers' Comp. Comm 'n v. Patient Advocates a/Tex., 136 S.W.3d 643, 654 (Tex. 2004); see also
FM Props., 22 S.W.3d at 873; Tex. Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d
454, 466 (Tex. 1997). "Thus, the Legislature may delegate legislative power to local governments,
administrative agencies, and even private entities under certain conditions." FM Props., 22
S.W.3d at 873. Any such delegation "must be exercised with a certain amount of caution." Patient
Advocates, 136 S.W.3d at 654. If the Legislature delegates its authority to a private entity, the
delegation will be "subject to more stringent requirements and less judicial deference" than a

given authoritative powers of determination, usually in conjunction with a public administrative agency." Tex. Boll
Weevil Eradication Found, Inc. v. Lewellen, 952 S. W.2d 454, 4 70-71 (Tex. 1997) (quotation marks omitted).

        4
          See Brief and Enclosure from Honorable Richard Cordes, Menard Cty. Judge (Sept. 21, 2016) ("Brief' and
"Brief Enclosure," respectively) (on file with the Op. Comm.).

        5The  makeup of the board under the Updated Plan would differ from the original Plan only in that the Menard
County Judge would appoint "[t]wo landowners with adjudicated rights or riparian [domestic and livestock] users."
Brief Enclosure at 3.
The Honorable J.D. Sheffield - Page 3            (KP-0133)



public delegation, given that it raises "more troubling constitutional issues." FM Props., 22
S.W.3d at 874 (explaining the difficulties that arise when private delegates "are not elected by the
people, appointed by a public official or entity, or employed by the government").

        In examining a private delegation, as contemplated in the original Plan, the Texas Supreme
Court applies the same analysis whether the delegation is made directly by the Legislature or
through an administrative agency. See Patient Advocates, 136 S.W.3d at 653-54. In either
instance, a court must first determine whether "in fact a delegation of power" to a private entity
has taken place. Id. at 654. In Texas, water and water rights are generally within the jurisdiction
of the Texas Commission on Environmental Quality (the "Commission'), including "water rights
adjudication, cancellation of water rights, and enforcement of water rights." TEX. WATER CODE
§ 5.013(a)(l). In particular, "[d]uring a period of drought or other emergency shortage of water,"
the executive director of the Commission may issue an order to "(1) temporarily suspend the right
of any person who holds a water right to use the water; and (2) temporarily adjust the diversions
of water by water rights holders." Id. § l l.053(a). To implement this authority, the Commission

               shall adopt rules ... (1) defining a drought or other emergency
               shortage of water for purposes of [section 11.053]; and (2)
               specifying the: (A) conditions under which the executive director
               may issue an order under this section; (B) terms of an order issued
               under this section, including the maximum duration of a temporary
               suspension or adjustment under this section; and (C) procedures for
               notice of, an opportunity for a hearing on, and the appeal to the
               commission of an order issued under this section.

Id. § l l.053(c). A court examining the Plan and any implementing legislation to determine
whether a private delegation has taken place would thus consider whether the Commission retains
this statutory authority or whether the Plan instead permits the private entity to set public policy,
provide the details of the law, "promulgate rules and regulations to apply the law, [or] ascertain
conditions upon which existing laws may operate." See FM Props., 22 S.W.3d at 873. If a court
concluded that a private delegation exists, it would then examine the constitutionality of such a
delegation, bearing in mind that "courts should, when possible, read delegations narrowly to
uphold their validity." Tex. Boll Weevil, 952 S.W.2d at 475.

       Generally, "the Legislature may delegate its powers to private entities if the legislative
purpose is discernable and there is protection against the arbitrary exercise of power." Patient
Advocates, 136 S.W.3d at 654 (quotation marks omitted). To apply a "more searching scrutiny"
to such a private delegation, the Texas Supreme Court uses an eight-factor test it established to
weigh the constitutionality of a private delegation. Id. (referring to the test as established in Boll
Weevil). Under that test, the Court asks:

               1. Are the private delegate's actions subject to meaningful review
                  by a state agency or other branch of state government?

               2. Are the persons affected by the private delegate's actions
                  adequately represented in the decisionmaking process?
The Honorable J.D. Sheffield - Page 4           (KP-0133)



                3. Is the private delegate's power limited to making rules, or does
                   the delegate also apply the law to particular individuals?

                4. Does the private delegate have a pecuniary or other personal
                   interest that may conflict with its public function?

                5. Is the private delegate empowered to define criminal acts or
                   impose criminal sanctions?

                6. Is the delegation narrow in duration, extent, and subject matter?

                7. Does the private delegate possess special qualifications or
                   training for the task delegated to it?

                8. Has the Legislature provided sufficient standards to guide the
                   private delegate in its work?

FM Props., 22 S.W.3d at 874; see also Tex. Boll Weevil, 952 S.W.2d at 472 (emphasizing that
"these standards apply only to private delegations, not to the usual delegation by the Legislature
to an agency or another department of government"). As a general rule, no single factor weighs
more heavily than another, "but the importance of each factor will necessarily differ in each case."
FM Props., 22 S.W.3d at 875, 888 (considering the weight of the Boll Weevil factors "as a whole");
see also Tex. Boll Weevil, 952 S.W.2d at 475 (noting that private delegations do not have to satisfy
all eight factors in order to be upheld as constitutional). In the case of a statute delegating
legislative power to "private interested parties," the Texas Supreme Court gives more weight to
the first and fourth factors. See FM Props., 22 S.W.3d. at 875.

        Given the preliminary status of the original Plan you have submitted, we are unable to
make definitive conclusions as to the constitutionality of the delegation. Yet we can make the
following observations in light of the Court's Boll Weevil factors. We begin with the first and
fourth factors, which consider meaningful review and conflict of interest, respectively. Id at 874.
Under the Plan, each water user has "the right to review board evaluations" and decisions to curtail
usage by requesting an appeal to the Commission. Attachment at 8. General complaints to the
board may also be appealed to the Commission. Id A landowner's refusal to comply with a board
order requiring water usage curtailment also "shall be referred to" the Commission, which "will
investigate Board findings" and resolve the dispute. Id Thus, at least some of the board's actions
are subject to meaningful review by a state agency, which would weigh in favor of
constitutionality. But it appears that at least some of the members of the board would have a
pecuniary interest in the decisions of the board, making the fourth factor weigh against
constitutionality.

       Considering the remaining factors, some weigh in favor of finding the Plan constitutional.
For example, under the fifth factor (empowerment to define criminal acts or impose sanctions),
the Plan does not provide the board with authority to define criminal acts or impose criminal
sanctions. Considering the seventh factor (special qualifications or training), the Plan requires that
the board include a "representative from [the Commission], a hydrologist, and all groundwater
and/or underground water district managers in the four-county management area," suggesting that
The Honorable J.D. Sheffield - Page 5            (KP-0133)



at least some members must possess special qualifications or training for the tasks delegated to the
board. Id. at 3.

        On the other hand, certain factors weigh against constitutionality, such as the third (scope
of power) and sixth (how narrow the delegation is in duration, extent, and subject matter).
Specifically, the board has the authority to issue an order curtailing water usage, so the board
would apply the law to particular individuals and would not merely make rules. And while the
Plan creates term limits for the individual board members, it would not limit the overall duration
of the board's authority.

        Still other factors, such as the second (adequate representation of those affected) and eighth
(sufficiency oflegislatively-provided guidance), are unknown, and thus we do not have sufficient
information to determine in which direction those factors weigh. A court examining the original
Plan and any implementing legislation, using the guiding principle that "[t]he nondelegation
doctrine should be used sparingly," would analyze all of the facts presented and determine whether
the Boll Weevil factors as a whole weigh in favor of or against constitutionality. Tex. Boll Weevil,
952 S.W.2d at 475.

       If a delegation of legislative authority is instead to another governmental entity, as in the
Updated Plan, the Texas Supreme Court uses a much less stringent standard, focusing simply on
whether the Legislature "establish[ed] reasonable standards to guide" the public entity in
exercising such powers. Patient Advocates, 136 S.W.3d at 654; see also Tex. Boll Weevil, 952
S.W.2d at 467. A court would thus analyze anylegislation implementing a public delegation
accordingly.

        We tum to the issue of a potential taking. You refer to the Plan's guidelines for water
curtailment, which are set according to the river flow measured at the gauge in Menard. See
Request Letter at 4; Attachment at 4. You suggest that because the gauge "is located above (i.e.,
upstream from)" certain allegedly illegal diversions of state water, the Plan allows certain users to
take "as much water as they want" while downstream domestic and livestock users in effect
"surrender involuntarily their constitutional priority ... without recourse or due compensation."
Request Letter at 4-5.

        Article I, section 17(a) of the Texas Constitution provides in pertinent part that "[n]o
person's property shall be taken, damaged, or destroyed for or applied to public use without
adequate compensation being made." TEX. CONST. art. I, § 17. In construing this provision, the
Texas Supreme Court has "generally been guided by the United States Supreme Court's
construction and application of the similar guarantee provided by the Fifth Amendment to the
United States Constitution." Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 838 (Tex. 2012).
The first factor in that federal framework is "the economic impact of the regulation on the
claimant." Hearts BluffGame Ranch, Inc. v. State, 381S.W.3d468,477 (Tex. 2012). "The second
factor ... is the character of the governmental action." Id. at 477-78; see also Edwards Aquifer,
369 S.W.3d at 839 ("for instance, whether [the regulation] amounts to a physical invasion or
instead merely affects property interests through some public program adjusting the benefits and
burdens of economic life to promote the common good" (quotation marks omitted)). The third
consideration is "the extent to which the regulation has interfered with the economic expectations
The Honorable J.D. Sheffield - Page 6            (KP-0133)



·of the property owner." Hearts Bluff, 381 S.W.3d at 478. "[W]hether a particular property
restriction is a taking depends largely on 'upon the particular circumstances [in that] case.'" Id. at
477 (quoting Penn Cent. Transp. Co. v. City of NY, 438 U.S. 104, 124 (1978)). A court
considering such circumstances in light of this federal framework must take into account the
 surrounding circumstances and apply "a fact-sensitive test of reasonableness, but in the end,
whether the facts are sufficient to constitute a taking is a question of law." Edwards Aquifer, 369
S.W.3d at 839 (quotation marks omitted) (noting that the federal inquiry "focuses directly upon
the severity of the burden that government imposes upon private property rights"); see also
Sheffield Dev. Co., Inc. v. City of Glenn Heights, 140 S.W.3d 660, 671 & n.52 (Tex. 2004)
(acknowledging the contentious and perplexing nature of takings cases and characterizing them as
"a sophistic Miltonian Serbonian Bog" where "armies whole have sunk") (quoting City ofAustin
v. Teague, 570 S.W.2d 389, 391 (Tex. 1978) and JOHN MILTON, PARADISE LOST49, bk. II, 11. 592-
94 (Scott Elledge ed., Norton & Co. 1993) (1674)). Given the unique nature of each landowner's
property rights and other unknown factors, we are unable to offer general observations about how
a court might apply the federal framework to individual facts.
The Honorable J.D. Sheffield - Page 7           (KP-0133)



                                       SUMMARY

                        The constitutionality of a proposed management plan (the
               "Plan") for the Upper San Saba River involving a potential
               delegation of legislative authority, and whether such a Plan would
               result in a regulatory taking, involves fact determinations that cannot
               be resolved in an attorney general opinion.

                       If the Plan involves a delegation of legislative authority to a
               private entity, a court would first confirm the delegation, examining
               whether the Plan results in a private entity setting public policy,
               providing the details of the law, promulgating rules and regulations
               to apply the law, or ascertaining conditions upon· which existing
               laws may operate. If so, the court would apply the eight-factor test
               established in Texas Boll Weevil Eradication Foundation, Inc. v.
               Lewellen to determine whether the factors as a whole weigh in favor
               of or against constitutionality. If the Plan involves a delegation of
               legislative authority to a public entity, a court examines whether the
               Legislature established reasonable standards to guide the public
               entity in exercising such powers.

                       A court considering a regulatory takings challenge would
               use a federal framework examining: (1) "the economic impact of the
               regulation on the claimant"; (2) the "character of the governmental
               action"; and (3) the "extent to which the regulation has interfered
               with the economic expectations of the property owner."

                                              Very truly yours,


                                             ~?~
                                              KEN PAXTON
                                              Attorney General of Texas



JEFFREY C. MATEER
First Assistant Attorney General
The Honorable J.D. Sheffield - Page 8      (KP-0133)



BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

BECKY P. CASARES
Assistant Attorney General, Opinion Committee
