City of Houston v. BCCA Appeal Group, Inc.

Opinion issued August 29, 2013

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-11-00332-CV

———————————

CITY OF HOUSTON, Appellant

V.

BCCA APPEAL GROUP, INC., Appellee

On Appeal from the 269th District Court

Harris County, Texas

Trial Court Case No. 2008-09399

MEMORANDUM OPINION

The present dispute requires us to determine the constitutionality of a home-

rule city’s ordinance which purports to regulate air pollution within that city’s

borders. The BCCA1 Appeal Group, Inc. (the Group), a non-profit organization

whose members own and operate industrial facilities in the Houston area, brought

suit to enjoin enforcement of two air pollution control ordinances enacted by the

City of Houston (the City)—City of Houston Ordinance Nos. 2007-208 and 2008-

414 (collectively, the Ordinance). The Group asserts that the Ordinance is

preempted by state law. The parties filed cross-motions for summary judgment;

the trial court denied the City’s motion and granted the Group’s motion. We

reverse the trial court’s judgment and render judgment in favor of the City.

I. Background

The Group asserts that the Ordinance is preempted because it claims for the

City several powers the Legislature granted exclusively to the Texas Commission

on Environmental Quality (TCEQ) in the Texas Clean Air Act (TCAA) and the

provisions of the Texas Water Code (TWC) that govern enforcement of the TCAA.

According to the Group, the Ordinance conflicts with the TCAA, TWC, and

Article XI, Section 5 of the Texas Constitution which bars home-rule cities from

enacting any ordinance that is “inconsistent with the Constitution of the State, or of

the general laws enacted by the Legislature of this State.” TEX. CONST. art. XI,

§ 5(a). With that in mind, we will begin by discussing the relevant portions of the

Ordinance, TCAA, and TWC.

1

BCCA stands for “Business Coalition for Clean Air.”

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a. Texas Clean Air Act and Texas Water Code

In 1967, the Texas Legislature enacted the TCAA which was intended to

safeguard the state’s air resources without compromising the economic

development of the state. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d

440, 443 (Tex. 1993). The TCAA also created an administrative agency which is

now known as the TCEQ and granted the agency the authority to promulgate

regulations to accomplish the TCAA’s goals, namely “to safeguard the state’s air

resources from pollution by controlling or abating air pollution and emissions of

air contaminants, consistent with the protection of public health, general welfare,

and physical property, including the esthetic enjoyment of air resources by the

public and the maintenance of adequate visibility.” 2 TEX. HEALTH & SAFETY CODE

ANN. § 382.002(a) (West 2010); see also Tex. Ass’n of Bus., 852 S.W.2d at 443.

TCEQ’s rules are codified in title 30 of the Administrative Code. Specifically, the

TCAA states that TCEQ shall administer the TCAA and accomplish the TCAA’s

purpose “through the control of air contaminants by all practical and economically

2

The agency that was initially created by the TCAA was the Texas Air Control

Board. In 1991, the Texas Air Control Board and Texas Water Commission

merged and became the Texas Natural Resources Conservation Commission

which was later renamed the TCEQ in 2001. See City of Carrollton v. Tex.

Comm’n on Envtl. Quality, 170 S.W.3d 204, 213 n.5 (Tex. App.—Austin 2005, no

pet.); United Copper Indus. v. Grissom, 17 S.W.3d 797, 804 n.5 (Tex. App.—

Austin 2000, pet. dism’d).

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feasible methods.” See TEX. HEALTH & SAFETY CODE ANN. § 382.011(b) (West

2010).

The TCAA authorizes TCEQ to issue orders and make determinations as

necessary to carry out the TCAA’s purposes. TEX. HEALTH & SAFETY CODE ANN.

§ 382.023(a) (West 2010). If it appears that the TCAA or a TCEQ rule, order, or

determination is being violated, TCEQ may, inter alia, “take any other action

authorized by [the TCAA] as the facts may warrant.” Id. § 382.023(b) (West

2010); see also 30 TEX. ADMIN. CODE § 70.5 (stating TCEQ may resolve

enforcement matters “informally without a contested case proceeding in

appropriate circumstances”; stating other remedies available to TCEQ in

enforcement actions include, inter alia, “issuance of administrative orders with or

without penalties; referrals to the Texas Attorney General’s Office for civil judicial

action; referrals to the Environmental Protection Agency for civil judicial, or

administrative action; referrals for criminal action; or permit, license, registration,

or certificate revocation or suspension”).

Under the TCAA, TCEQ has the sole authority to authorize air emissions,

which includes the authority to issue and enforce permits for sources of air

contaminants. See TEX. HEALTH & SAFETY CODE ANN. § 382.051 (West 2010)

(authorizing TCEQ to issue and administer pre-construction permits, operating

permits, special, general and standard permits, and “other permits as necessary”);

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see also State v. Associated Metals & Minerals Corp., 635 S.W.2d 407, 410 (Tex.

1982) (holding that trial court lacked authority to modify air permit since TCEQ’s

predecessor agency had “sole authority” to grant or deny permits and set emission

levels). The TCAA also requires TCEQ to adopt, charge, and collect certain fees

associated with its regulatory program. See, e.g., TEX. HEALTH & SAFETY CODE

ANN. § 382.062(a) (West 2010) (requiring TCEQ to adopt, charge, and collect

permit and inspection application fees); id. at § 382.0621(a) (West 2010) (requiring

TCEQ to adopt, charge, and collect annual operating permit fees).

Although TCEQ has primary responsibility for enforcing the state’s

environmental laws, see TEX. WATER CODE ANN. § 5.012 (West 2008), the TCAA

also acknowledges that home-rule cities have an important role to play with respect

to air quality regulation in the State. See TEX. HEALTH & SAFETY CODE ANN.

§ 382.113 (West 2010). Subchapter E of the TCAA expressly recognizes that “a

municipality has the powers and rights as are otherwise vested by law in the

municipality to . . . abate a nuisance; and . . . enact and enforce an ordinance for

the control and abatement of air pollution.” Id. at § 382.113(a). Such ordinances,

however, must be “consistent with [the TCAA] and [TCEQ’s] rules and orders”

and cannot “make unlawful a condition or act approved or authorized under [the

TCAA] or [TCEQ’s] rules or orders.” Id. at § 382.113(b).

In addition to the right to enact and enforce its own air-pollution abatement

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programs, home-rule cities, as well as other local governments, have the right to

enforce state-level air-quality rules and regulations. Specifically, the TCAA

provides that local governments may enter and inspect property to determine

compliance with the TCAA or a TCEQ rule, variance or order, and requires them

to share the results of their inspections with TCEQ when requested. See TEX.

HEALTH & SAFETY CODE ANN. § 382.111 (West 2010). Local governments may

also contract with the TCEQ or with one another to accomplish air quality

management, inspection, and enforcement functions and local governments may

receive a share of the fees that TCEQ collects to fund their local air-quality

inspection programs. See id. at §§ 382.0622(d), .115(1) (West 2010). Local

governments may also make recommendations to the TCEQ and petition the

agency for a rulemaking. Id. at § 382.112 (West 2010).

Local governments also have the right to sue in civil district court for civil

penalties or injunctive relief for violations of the TCAA. TEX. WATER CODE ANN.

§ 7.351 (West 2008). Any civil suits initiated by a local government under this

subchapter of the TWC, however, must be authorized by the local government’s

governing body and TCEQ must be joined as a party. Id. at §§ 7.352, .353 (West

2008). Any civil penalties recovered by the municipality must be shared equally

with the state. Id. at § 7.107 (West 2008).

In addition to the provision in the TWC authorizing local governments and

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other parties to enforce the TCAA by civil suits, chapter 7 sets forth additional

provisions governing enforcement of the TCAA. See id. at §§ 7.001, .0025–.005,

.031–.051, .0525–.066, .068–.183, .184–.186, .188–.255, .301, .303–.358 (West

2008), §§ .002, .006, .052, .067, .1831, .187, .256, .320 (West Supp. 2012).

Specifically, the TWC states that the TCEQ may enforce the TCAA through a

number of methods including, inter alia, assessing administrative penalties,

directing corrective action, revoking permits, and requesting the Attorney

General’s Office to file a civil suit seeking injunctive relief and/or civil penalties.

See id. at §§ 7.032 (authorizing suits for injunctive relief), 7.051 (authorizing

assessment of administrative penalties by TCEQ), 7.073 (authorizing assessment of

administrative penalties and order of corrective action), 7.105 (authorizing attorney

general to file civil suits seeking civil penalties and/or injunctive relief), &

7.302(a)(4), (b) (authorizing revocation or suspension of permits issued pursuant to

TCAA).

b. City’s Air Quality Ordinance

The City enacted an air-quality ordinance in 1992 which, until 2007, only

regulated air pollution from facilities that were not already regulated by the State,

i.e., sources of emissions not subject to regulation and licensure by the TCEQ.

See generally HOUS., TEX., CODE OF ORDINANCES, ch. 21, art. VI (2013). Prior to

2007, the City contracted with TCEQ and cooperated with the agency to ensure

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that sources of emissions located within the City’s borders were in compliance

with state law by inspecting and referring cases for enforcement action to the

TCEQ. See TEX. HEALTH & SAFETY CODE ANN. § 382.115(1) (authorizing local

governments to enter into cooperative agreements with TCEQ or with one another

to provide for performance of air quality management, inspection, and enforcement

functions). After fiscal year 2005, however, the City chose not to renew its

contractual relationship with the agency.

Instead, in 2007, the City amended the Ordinance and established its own air

quality regulatory compliance program, along with a new fee schedule to fund the

program. HOUS., TEX., ORDINANCE 2007-208 (Feb. 14, 2007) (amending Chapter

21 of Code of Ordinances). The 2007 amendment expanded the Ordinance’s scope

to include the regulation of facilities and sources subject to regulation by TCEQ.

The Ordinance, as amended in 2007, also made it “unlawful for any person to

operate or cause to be operated any facility” inside the City’s borders unless the

facility was registered with the City. ORD. at § 21-162(a). Under the Ordinance,

such City-issued registrations would only be “issued by the health officer” after the

facility tendered “the applicable fee.” Id. at § 21-163. Such violations are

punishable by a fine of not less than $250 but not more than $1,000 for first-time

offenders (and a fine of not less than $1,000 but not more than $2,000 for repeat

offenders).” Id. at § 21-162(c). Citations for such violations, “like all city tickets,

8

are enforced in municipal court.” See generally City’s “Draft FAQ About the

Changes to the City of Houston Air Pollution Abatement Program and Registration

Ordinance.”

Prior to 2007, the Ordinance authorized the City’s health officers to “carry

out a regulatory compliance program to determine whether registered facilities are

in compliance with all applicable state and federal air pollution control laws and

regulations.” HOUS., TEX., ORDINANCE 92-180 § 21-164 (Feb. 2, 1992). Section

21-164 was amended in 2007. Rather than broadly referring to “air pollution

control laws and regulations,” the City opted to incorporate specific Administrative

Code provisions by reference. See ORD. 2007-208 § 21-164. Under the version of

section 21-164 enacted in 2007, a laundry list of state-level air pollution control

laws and regulations implemented by the TCEQ are incorporated “as if written

word for word in this section, including appendices and other matters promulgated

as part of the state rules.” See id. at § 21-164(a). Section 21-164, as amended in

2007, further states that such air pollution control laws and regulations are

incorporated by reference “as they currently are and as they may be changed from

time to time.” See id. The Ordinance directs the City’s health officers to “carry

out a regulatory compliance program to determine whether registered facilities are

in compliance with all applicable state and federal air pollution control laws and

9

regulations” and that “[c]ivil, administrative and criminal sanctions imposed by

law shall be pursued where violations are determined to exist.” Id. at § 21-164(b).

The Group filed suit in 2007 asking the trial court to declare the Ordinance

unconstitutional and to enjoin the City from enforcing it. While the Group’s suit

was pending, the City amended the Ordinance in 2008 and made it “an affirmative

defense to prosecution [under the Ordinance] . . . that the prosecuted condition or

activity has been: (1) Approved or authorized by the [TCAA], state rule or state

order; and (2) That the facility is in compliance with any such approval or

authorization under the [TCAA], state rule or state order.” HOUS., TEX.,

ORDINANCE 2008-414 § 21-164(d) (May 7, 2008). The 2008 amendments also

removed the word “criminal” (without removing the references to prosecution),

and capped the fees per location at the highest four fees for the facilities at that

location.

c. Cross-motions for Traditional Summary Judgment

Both the City and the Group filed cross-motions for summary judgment. In

its motion, the City argued that it was entitled to summary judgment because the

Group did not have standing to bring the declaratory judgment action and, even if

the Group did have standing, the Ordinance was a legitimate exercise of the City’s

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police powers.3 According to the City, its right to regulate air pollution within its

borders was not limited by any state law, and in fact, the Ordinance was consistent

with applicable state law and in compliance with the Texas Constitution.

In its motion for summary judgment, the Group argued that it had standing

to bring the declaratory judgment action and was entitled to have the Ordinance

declared invalid and the City enjoined from enforcing the Ordinance as a matter of

law. The Group argued that the TCAA created a comprehensive regulatory

scheme which gave the TCEQ the exclusive authority to issue permits, set

emission ceilings, assess fees, and otherwise regulate the state’s air quality. It also

set forth in express terms the manner in which local governments, including home-

rule cities, could exercise enforcement authority with respect to the regulation of

air pollution (e.g., through cooperative agreements with either TCEQ or other local

governments, by bringing a civil suit in district court in which TCEQ was named

as a necessary party, by enacting and enforcing ordinances for the control and

abatement of air pollution that are not inconsistent with the TCAA or TCEQ’s

rules or orders).

According to the Group, the Ordinance, which created a “duplicative and

inconsistent regulatory scheme,” was an invalid attempt by the City to usurp

3

Although the City initially disputed the Group’s standing to bring this suit and

sought summary judgment on that basis, the trial court held that the Group had

organizational standing. The City is not appealing this portion of the trial court’s

order.

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TCEQ’s authority to regulate the state’s air quality and was inconsistent with state

law. For example, the Group argued that the provisions of the Ordinance requiring

facilities to register with, and pay fees to, the City were inconsistent with the

TCAA and made illegal conduct that was otherwise legal under state law. The

Group further argued that the Ordinance’s wholesale incorporation by reference

with respect to specific state-level air pollution control laws as set forth in the

Administrative Code “as they currently are and as they may be changed from time

to time,” see ORD. § 21-164, constituted an impermissible delegation of the City’s

authority.

After extensive briefing and argument on the parties’ cross-motions for

traditional summary judgment, the trial court ruled in an eleven-page order that the

Ordinance was an invalid exercise of municipal power because it was inconsistent

with state law. The final judgment issued on March 31, 2011, granted the Group’s

motion for summary judgment, denied the City’s motion, declared the Ordinance’s

registration program, fees, and enforcement procedures to be unenforceable, and

enjoined the City from enforcing the Ordinance.

The City is appealing.

II. Standard of Review

Traditional summary judgment is proper only when the movant establishes

that there is no genuine issue of material fact and the movant is entitled to

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judgment as a matter of law. TEX. R. CIV. P. 166a(c); Browning v. Prostok, 165

S.W.3d 336, 344 (Tex. 2005). When we review cross-motions for summary

judgment, we consider both motions de novo and render the judgment that the trial

court should have rendered. See Tex. Mun. Power Agency v. Pub. Util. Comm’n of

Tex., 253 S.W.3d 184, 192 (Tex. 2007).

We review de novo the trial court’s ruling on the validity of an ordinance

and we consider all the circumstances and determine as a matter of law whether the

legislation is invalidated by a relevant statute or constitutional provision. Quick v.

City of Austin, 7 S.W.3d 109, 116 (Tex. 1998) (citing City of Brookside Village v.

Comeau, 633 S.W.2d 790, 793 (Tex. 1982)). In doing so, we presume that the

ordinance is valid, and hold the challenging party to its “extraordinary burden” to

establish that the ordinance is invalid. See City of College Station v. Turtle Rock

Corp., 680 S.W.2d 802, 805 (Tex. 1984); Comeau, 633 S.W.2d at 792–93. An

ordinance is a valid exercise of a city’s police power so long as the regulation was

adopted to accomplish a legitimate goal, that is, it must be “substantially related”

to the health, safety, or general welfare of the people. See Turtle Rock Corp., 680

S.W.2d at 805.

a. Powers of Home Rule Municipality

Home-rule cities, such as the City, derive their power from article XI,

section 5 of the Texas Constitution. See TEX. CONST. art. XI, § 5; TEX. LOCAL

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GOV’T CODE ANN. § 51.072 (West 2008); Lower Colorado River Auth. v. City of

San Marcos, 523 S.W.2d 641, 643 (Tex. 1975) (citing Glass v. Smith, 244 S.W.2d

645, 649 (Tex. 1951)). Therefore, a home-rule city looks to the Legislature not for

grants of authority, but for limitations on their powers. City of San Marcos, 523

S.W.2d at 643. The Legislature may limit the power of home-rule cities either

expressly or by implication, so long as those limitations appear with “unmistakable

clarity.” Id. at 645 (citing City of Sweetwater v. Geron, 380 S.W.2d 550, 552 (Tex.

1964)).

When a home-rule city ordinance appears to be in conflict with a state

statute, our duty is to reconcile the two “if any fair and reasonable construction of

the apparently conflicting enactments exist[s] and if that construction will leave

both enactments in effect.” Int’l Ass’n of Fire Fighters, Local 1173 v. City of

Baytown, 837 S.W.2d 783, 787 (Tex. App.—Houston [1st Dist.] 1992, pet. denied)

(citing City of Beaumont v. Fall, 116 Tex. 314, 291 S.W. 202, 206 (1927)). If it is

not possible to reconcile the two enactments, the state statute trumps the city

ordinance. Dall. Merchant’s and Concessionaire’s Ass’n v. City of Dall., 852

S.W.2d 489, 491 (Tex. 1993) (home-rule city’s ordinance that attempts to regulate

subject matter preempted by state statute unenforceable to extent it conflicts with

statute).

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b. Principles of Statutory Construction

Questions of statutory interpretation are questions of law which we review

de novo. City of DeSoto v. White, 288 S.W.3d 389, 394 (Tex. 2009). Under the

well-settled principles of statutory construction, we begin with the statutory

language itself. See State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). Our

primary goal is to give effect to the Legislature’s intent, and we turn first to the

plain meaning of the words and terms chosen. See id.; Owens & Minor, Inc. v.

Ansell Healthcare Prods., Inc., 251 S.W.3d 481, 483 (Tex. 2008) (citation omitted)

(“[I]t is a fair assumption that the Legislature tries to say what it means, and

therefore the words it chooses should be the surest guide to legislative intent.”).

We presume that every word in a statute was chosen by the Legislature for a

purpose. TGS–NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex.

2011).

If the statutory language is clear and unambiguous, we interpret its words

according to their plain and common meaning unless that interpretation would lead

to absurd results. Id. When a statute’s language is unambiguous, it is

inappropriate to resort to rules of construction or extrinsic aids. City of Rockwall v.

Hughes, 246 S.W.3d 621, 626 (Tex. 2008); Fitzgerald v. Advanced Spine Fixation

Sys., Inc., 996 S.W.2d 864, 865–66 (Tex. 1999). The judiciary’s role “is not to

second-guess the policy choices that inform our statutes or to weigh the

15

effectiveness of their results; rather, our task is to interpret those statutes in a

manner that effectuates the Legislature’s intent.” F.F.P. Operating Partners, L.P.

v. Duenez, 237 S.W.3d 680, 690 (Tex. 2007) (quoting McIntyre v. Ramirez, 109

S.W.3d 741, 748 (Tex. 2003)). We use these same rules to construe municipal

ordinances. See Bd. of Adjustment of City of San Antonio v. Wende, 92 S.W.3d

424, 430 (Tex. 2002).

III. Analysis

The question before us is whether the TCAA or TWC preempts the City’s

authority to enact the Ordinance or if, instead, there is a reasonable construction

under which both these statutes and the Ordinance remain enforceable.

a. The City’s authority to regulate air pollution or enact air

pollution abatement programs is not preempted by state law.

If the Legislature decides to preempt a subject matter normally within a

home-rule city’s broad police powers (either expressly or by implication), it must

do so with “unmistakable clarity.” Dall. Merchant’s, 852 S.W.2d at 491; see also

State v. Chacon, 273 S.W.3d 375, 378 (Tex. App.—San Antonio 2008, no pet.).

i. Express Preemption

The Group argues that the TCAA gave the TCEQ the exclusive authority to

issue permits, set emission ceilings, assess fees, and otherwise regulate the state’s

air quality. Neither the TCAA nor the state constitution, however, contains

language expressly limiting a home-rule city’s power—or granting TCEQ

16

exclusive authority—to enact the type of regulations at issue here, i.e., air pollution

abatement programs. 4 On the contrary, the TCAA expressly and unambiguously

acknowledges the City’s right to enact and enforce its own air pollution abatement

program, subject to two previously mentioned limitations. See TEX. HEALTH &

SAFETY CODE ANN. § 382.113(a)(2), (b) (stating “a municipality has the powers

and rights . . . [to] enact and enforce an ordinance for the control and abatement of

air pollution, or any other ordinance, not inconsistent with [the TCAA] or

[TCEQ’s] rules or orders” and does not “make unlawful a condition or act

approved or authorized under [the TCAA] or [TCEQ’s] rules or orders.”) As such,

the TCAA does not expressly preempt the City’s power to regulate air pollution

within its borders.

ii. Preemption By Implication

The lack of an express preemption, however, does not end our analysis. We

must now determine whether the Ordinance is implicitly preempted by state law.

The Group argues that the Legislature can express its intention to preempt local

4

Had the legislature intended the state to be the exclusive regulator of air pollution

within the state’s borders, it certainly could have done so, and indeed, has done so

with respect to other areas of regulation. See, e.g., TEX. ALCO. BEV. CODE ANN.

§ 1.06 (West 2007) (“Unless otherwise specifically provided by the terms of this

code, the manufacture, sale, distribution, transportation, and possession of

alcoholic beverages shall be governed exclusively by this code.”); TEX. NAT. RES.

CODE ANN. § 133.085(c) (West 2011) (“The provisions [of the Quarry Safety Act]

supercede any other municipal ordinance or county regulation that seeks to

accomplish the same ends as set out herein.”).

17

regulation with “unmistakable clarity” by implementing a comprehensive

regulatory regime that regulates the specific details of a given subject-matter (i.e.,

by occupying the field of regulation with respect to the subject matter). Although

the TCAA is extensive in its scope and there is considerable overlap between the

Ordinance and the TCAA, the mere fact that the City is attempting to regulate the

same subject-matter as the State does not, in and of itself, mean that the legislature

intended to preempt such municipal regulation, much less with “unmistakable

clarity.” City of Richardson v. Responsible Dog Owners of Tex., 794 S.W.2d 17,

19 (Tex. 1990) (holding home-rule city’s comprehensive animal control ordinance

not preempted by state penal code provisions governing keeping of vicious dogs,

despite “small area of overlap”; stating that “the mere fact that the legislature has

enacted a law addressing a subject does not mean that the subject matter is

completely preempted”); see also Brooks v. State, 226 S.W.3d 607, 610–11 (Tex.

App.—Houston [1st Dist.] 2007, no pet.) (citation omitted) (“In the absence of

express limitations, there is nothing that prevents a city from enacting an ordinance

covering the same subject as state or federal regulations.”).

Generally, such ordinances are only void if they are inconsistent with state

law. See TEX. CONST. art. XI, § 5(a) (prohibiting home-rule cities from enacting

ordinances that “contain any provision inconsistent with the Constitution of the

State, or of the general laws enacted by the Legislature of this State”). With

18

respect to the TCAA, an ordinance that attempts to regulate the same subject

matter as the TCAA is valid so long as it (1) is not inconsistent with the TCAA, the

TWC provisions enforcing the TCAA, or TCEQ’s rules, regulations, and orders,

and (2) does not make unlawful a condition or act approved or authorized under

the TCAA, TWC, or TCEQ’s rules, regulations, or orders. See TEX. HEALTH &

SAFETY CODE ANN. § 382.113(b).

iii. Discussion

The Ordinance requires facilities to register with the City by filing an

application and paying the applicable registration fee. See ORD. §§ 21-163, -166.

It is unlawful to operate a facility within the City’s boundaries that is not registered

with the City. See id. at § 21-162(a). Such violations are punishable by a fine of

not less than $250 but not more than $1,000 for first-time offenders (and a fine of

not less than $1,000 but not more than $2,000 for repeat offenders). Id. at § 21-

162(c). The Group argues that these sections are not only inconsistent with state

law, but also make unlawful a condition or act approved or authorized under state

law.

1. Registration (§ 21-163)

The Group argues that a facility’s lawful operation pursuant to TCEQ’s rules

and orders would nonetheless be unlawful under the Ordinance, if that facility

failed to register with the City or pay a registration fee. See ORD. §§ 21-162

19

(requiring registration; enforcement provision), 163 (governing issuance of

registration), & 166(a) (setting registration fees). Thus, according to the Group,

the entire registration program created by the ordinance is preempted. If the Group

is correct, then any concurrent regulatory scheme or permitting process by a

municipality would be preempted. This does not appear to be the prevailing law in

Texas.

Even when the Legislature gives an administrative agency extensive

authority to regulate a given subject-matter, a municipal ordinance that establishes

a parallel registration, licensing, and/or permitting program is not necessarily

preempted. See Unger v. State, 629 S.W.2d 811, 812–13 (Tex. App.—Fort Worth

1982, writ ref’d). In Unger, the Fort Worth Court of Appeals upheld the authority

of a home-rule city acting under its police power to both regulate and prohibit the

drilling of oil wells within the city limits, despite the fact that the Legislature had

given the Texas Railroad Commission (RRC) broad jurisdiction over all oil and

gas wells in Texas and authorized the RRC to, among other things, issue drilling

permits for such wells. See TEX. NAT. RES. CODE ANN. § 81.051 (a)(2) (West

2011) (granting RRC jurisdiction over all oil and gas wells in Texas); 16 TEX.

ADMIN. CODE § 3.5 (requiring RRC-issued drilling permits). The ordinance in

question made it unlawful to drill an oil or gas well within the city limits without a

city-issued drilling permit. Unger, 629 S.W.2d at 812. The court held that the

20

Legislature’s delegation of authority to the RRC to regulate the oil and gas

business in Texas—which includes the issuance of drilling permits—was not

inconsistent with municipal authority to also regulate in that area for its own

legitimate purpose. 5 See id. at 812–13.

Unger is “writ refused” and has the same precedential value as a Texas

Supreme Court opinion. Nevertheless, the Group cites to several opinions that pre-

date Unger for the general proposition that “field-preemption” is one way that the

Legislature can express its intention to preempt local regulation with

“unmistakable clarity.” See City of Beaumont, 291 S.W. at 205–06 (“In a word, as

long as the state does not, in its Constitution or by general statute, cover any field

of the activity of the cities of this state, any given city is at liberty to act for

itself.”); Prescott v. City of Borger, 158 S.W.2d 578, 581 (Tex. Civ. App.—

Amarillo 1942, writ ref’d) (“It is well established law in this state that, generally,

the governing authorities of cities are prohibited by the Constitution, Art. 11, Sec.

5 . . . from entering a field of legislation that has been occupied by general

legislative enactments.”).6 The oil and gas industry in Texas is heavily regulated

5

The same court upheld a similar ordinance the previous year on different grounds.

See Helton v. City of Burkburnett, 619 S.W.2d 23, 24 (Tex. App.—Fort Worth

1981, writ ref’d n.r.e.) (rejecting argument that city ordinance which required,

inter alia, permit to drill oil and gas well within city limits and assessed $250

permit fee, violated driller’s federal 14th Amendment rights).

6

The Group also relies upon City of Brookside Village v. Comeau, 633 S.W.2d 790,

796 (Tex. 1982) and City of Carrollton, 170 S.W.3d at 214—both of which are

21

and if the Legislature did not preempt the field with respect to the location of oil

and gas wells within the state’s borders, as it clearly did not, based upon Unger,7

then it certainly did not do so here with “unmistakable clarity.”

We note that the Texas Supreme Court recently held that another City

ordinance which required concrete-crushing facility operators to obtain a municipal

permit in order to operate within the city was preempted. See S. Crushed

Concrete, LLC v. City of Hous., 398 S.W.3d 676, 679 (Tex. 2013). That case,

however, is distinguishable. In Southern Crushed Concrete, the concrete-crushing

facility applied for, and was granted, a permit by TCEQ to operate at a given

location in the City. Id. at 677. The facility then applied to the City for a

municipal permit and was denied because the facility’s operations would violate

the City’s newly enacted land-use ordinance which imposed more restrictive

factually distinguishable. City of Carrollton, which—like the Attorney General’s

opinions the Group cites—is not binding authority, is also factually

distinguishable because the court in that case did not determine the validity of a

municipal ordinance, but rather whether the provisions in the Water Code that

spoke directly to the certificate cancellation process for all holders also applied to

a municipality that was also a certificate holder. 170 S.W.3d at 214. Comeau is

also factually distinguishable. In that case, the Supreme Court concluded that a

local ordinance governing the location of mobile homes was not inconsistent with,

and therefore, not preempted by, state and federal laws governing mobile home

construction, safety, and installation standards. 633 S.W.2d at 795–96. Although

the Court stated that the applicable state and federal statutes “preempted the field

as to construction, safety, and installation of mobile homes,” unlike here, those

statutes expressly prohibited local governments from adopting different standards.

7

See TEX. NAT. RES. CODE ANN. § 81.051 (a)(2) (West 2011) (granting Railroad

Commission jurisdiction over all oil and gas wells in Texas); 16 TEX. ADMIN.

CODE § 3.5 (requiring RRC-issued drilling permits).

22

locality restrictions than those imposed under the TCAA and TCEQ air quality

regulations and rules. Id. The Supreme Court rejected the City’s argument that the

ordinance did not abrogate TCEQ’s permit because the ordinance regulated land-

use, not air quality, noting that “[i]If the City’s contention were true, a city could

almost always circumvent section 382.113(b) and vitiate a [TCEQ] permit that it

opposes by merely passing an ordinance that purports to regulate something other

than air quality.” Id. at 679. The Court expressly limited its holding to such

circumstances by explaining that it was not deciding the issue of “whether a city

may more restrictively regulate an activity that the State also regulates.” Id.

Unlike in the Southern Crushed Concrete case, the City is not attempting to

hold an affected industry to a higher, more onerous standard than the one set forth

by the state. On the contrary, the Ordinance is the City’s attempt to create a

concurrent regulatory scheme or permitting process through which it will enforce

the state’s existing rules and regulations. In fact, the City acknowledges that its

decision to regulate and enforce the TCAA and TCEQ rules and regulations on its

own in this case—rather than in cooperation with TCEQ—is due to what it

perceives to be TCEQ’s lax enforcement efforts. According to the City, the Group

is only challenging the constitutionality of the Ordinance because the industry

“currently enjoys what it perceives to be a permissive regulatory approach from the

TCEQ” and it fears regulation by “a vigilant watch dog” (i.e., the City).

23

2. Fees and Enforcement (§§ 21-162 and 166)

The Group argues that because the City’s duplicative registration program is

preempted, the fees associated with it, which are also duplicative, are also invalid.

First, we note that although the TCAA requires TCEQ to adopt, charge, and

collect certain fees associated with its permitting process, the statute does not

prohibit a municipality that has adopted its own air-pollution abatement program—

which the TCAA recognizes it is authorized to do—from also charging and

collecting fees to fund the program. See, e.g., TEX. HEALTH & SAFETY CODE ANN.

§§ 382.062 (requiring TCEQ to adopt, charge, and collect fees for permit and

inspection applications), .0621 (requiring TCEQ to adopt, charge, and collect

annual operating permit fees), & .113(a) (recognizing municipality’s authority to

enact its own air-pollution abatement program). Thus, the TCAA does not

expressly preempt the imposition of such registration fees.

Second, we note that a home-rule city’s authority to enact ordinances under

its police power carries with it the corresponding right to impose fees to fund and

implement such ordinances; such fees are presumed valid if they are reasonably

associated with the cost of administering the ordinance. See City of Hous. v.

Harris Cnty. Outdoor Adver. Assoc., 879 S.W.2d 322, 326 (Tex. App.—[14th

Dist.] writ denied) (stating statutes or ordinances imposing fees under home-rule

city’s police power to regulate are prima facie valid and presumed reasonable);

24

City of Amarillo v. Maddox, 297 S.W.2d 750, 752 (Tex. Civ. App.—Amarillo

1956, no writ). The Group does not contend that the registration fees imposed

under section 21-166 are not reasonably associated with the cost of administering

the ordinance. On the contrary, the Ordinance’s fee schedule as amended in 2007

and 2008 is consistent with the TCAA’s own fee schedule. Compare TEX. HEALTH

& SAFETY CODE ANN. § 382.062(d) (West 2010) (authorizing application, permit,

and inspection fees of no less than $25 or more than $75,000) with ORD. 2007-208

§ 21-166(a) (setting registration fees of $250 to $3,000). See also ORD. 2008-414

§ 21-166(b) (“Should more than one facility exist on any premises, then the total of

all applicable fees shall be payable up to a maximum of the equivalent of a fee for

the four facilities with the highest fees.”).

Section 21-162’s enforcement provision only pertains to violations of the

Ordinance (i.e., a facility’s failure to register with the City in violation of the

Ordinance) and, as such, is not preempted by state law. See ORD. § 21-162(a)

(stating that it is unlawful to operate facilities within City’s boundaries that are not

registered with City). Such violations are punishable by a fine of not less than

$250 but not more than $1,000 for first-time offenders (and a fine of not less than

$1,000 but not more than $2,000 for repeat offenders). Id. at § 21-162(c).

3. Enforcement and Incorporation of State Law

The Group also challenges the validity of section 21-164 which lists ten

25

sections of the Texas Administrative Code and purports to incorporate them by

reference, as if they were written word for word in the Ordinance. See id. at

§ 21-164(a). Section 21-164(c) makes it unlawful to operate any facility not in

compliance with any of the TCEQ rules listed in 21-164(a). A violation of section

21-164 is punishable by a fine between $250 and $1,000 for first-time offenders

and a fine of between $1,000 and $2,000 for repeat offenders. Id. at § 21-164(e).

“Each day that any violation under this section continues shall constitute a separate

offense.” Id. at § 21-164(f).

The City argues that since the Ordinance incorporates the enforcement

provisions of the TCAA, the Ordinance can only be inconsistent with the TCAA if

the TCAA were inconsistent with itself. In other words, an act can only violate

section 21-164(a) of the Ordinance if it also violates the TCAA. The Group

responds that, unlike the Ordinance, the TCAA and TWC give TCEQ broad

discretion when it comes to determining compliance with the TCAA and TCEQ

rules and orders. See TEX. HEALTH & SAFETY CODE ANN. §§ 382.023–.025, .0216

(West 2010), § .0215 (West Supp. 2012); TEX. WATER CODE ANN. § 5.127.

According to the Group, the City’s duplicative program—with its wholesale

incorporation of only parts of the TCEQ regulatory scheme—would render the

TCEQ’s discretionary actions and determinations ineffective inside the City’s

limits, subverting the express goals of the Legislature. However, as the City points

26

out, the Ordinance not only requires the City’s health officers to cooperate with

county, state, and federal agencies in the enforcement of the state and local laws,

but the 2008 amendments to the Ordinance state that it was “an affirmative defense

to prosecution [under the Ordinance] . . . that the prosecuted condition or activity

has been: (1) Approved or authorized by the [TCAA], state rule or state order; and

(2) That the facility is in compliance with any such approval or authorization under

the [TCAA], state rule or state order.” ORD. § 21-164(d); see also id. at

§§ 21-146(3),-164(b).

A plain reading of the Ordinance, as amended, demonstrates that it does not

subvert the Legislature’s goals by rendering the TCEQ’s discretionary actions and

determinations ineffective inside the City’s limits. On the contrary, the City

officers charged with enforcing the Ordinance are required to defer to the agency’s

decisions with respect to the lawfulness of a given air-contaminant emitter’s

actions. If conduct is not unlawful under state law, as determined by TCEQ, it is

not unlawful under the Ordinance.

The Group also argues that the Ordinance impermissibly empowers the City

to prosecute air-quality cases criminally, in municipal court, rather than by filing

suit in civil district court. Local governments have the right to sue in civil district

court for civil penalties or injunctive relief for violations of the TCAA, so long as

the TCEQ is joined as a party and an administrative penalty has not been paid to

27

TCEQ for the violation. TEX. WATER CODE. ANN. §§ 7.068, .351, .353. Any civil

penalties recovered by the municipality must be shared equally with the state. Id.

§ 7.107. The Group contends that the Ordinance, which (1) only allows the City to

prosecute violations of state law in municipal court under criminal rules rather than

in district court under civil rules, as required by TWC section 7.351, (2) does not

require joinder of the TCEQ as a “necessary and indispensable party” in its

enforcement actions under this section, and (3) does not require the City to share

any penalties it recovers with TCEQ, is inconsistent with state law.

The TCAA expressly states that municipalities retain the power to enact and

enforce their own ordinances to control and abate air pollution. See TEX. HEALTH

& SAFETY CODE ANN. § 382.113(a)(2). It does not limit where or how the

municipality may carry out its enforcement responsibilities. Correspondingly, the

TWC “does not exempt a person from complying with or being subject to other

law,” and, most importantly, its remedies are “cumulative of all other remedies.”

TEX. WATER CODE ANN. §§ 7.004, .005. Thus, the City has the authority to sue in

civil district court for civil penalties or injunctive relief for violations of the TCAA

pursuant to the TWC, but it is not prohibited from enforcing its own air-pollution

abatement ordinances through other means. See generally TEX. LOC. GOV’T CODE

ANN. § 54.001(a) (West 2008) (“The governing body of a municipality may

enforce each rule, ordinance, or police regulation of the municipality and may

28

punish a violation of a rule, ordinance, or police regulation.”); id. at § 54.012(1),

(2) (West 2008) (“A municipality may bring a civil action for the enforcement of

an ordinance . . . for the preservation of public safety . . . [or] relating to the

preservation of public health. . . .”).

As the party seeking to invalidate the Ordinance, the Group bore the burden

of showing that the Legislature intended to preempt the Ordinance with

“unmistakable clarity.” The TCAA, which expressly acknowledges the City’s

right to enact and enforce its own air-pollution abatement programs, does not

prohibit such cities from bringing air-pollution suits under their own ordinances.

Furthermore, although the TWC gives cities the power to enforce state-level

air-pollution requirements in civil district court, it expressly states that such

remedies are cumulative, and thus it does not prohibit cities from enforcing their

ordinances—whether they be in criminal or civil proceedings—in municipal court.

As such, neither the TWC nor TCAA appears to preempt the City’s power to

enforce its own Ordinance which incorporates state law by reference, with

“unmistakable clarity.”

Invoking the statutory-construction principle of expressio unius est exclusio

alterius—the mention of one thing impliedly excludes other things of the same

type—the Group maintains that the Legislature’s delineation of a specific method

for local governments to enforce state air-pollution rules and regulations implies its

29

intent to prohibit local governments from enforcing those rules through any other

process. This principle, however, is not an inflexible rule, but merely a tool for

ascertaining legislative intent. See Mid–Century Ins. Co. v. Kidd, 997 S.W.2d 265,

274 (Tex. 1999). More importantly, because the statute is unambiguous, we need

not resort to such rules of construction or other extrinsic aids.

b. The Ordinance’s Incorporation of State Agency Rules Does Not

Constitute an Impermissible Delegation of City’s Power.

Section 21-163(a) lists ten sections of the Administrative Code and states that

these “air pollution control laws as they currently are and as they may be changed

from time to time, are hereby incorporated as if written word for word in this

section, including appendices and other matters promulgated as part of the state

rules.” See ORD. § 21-163.

The Group argues that, even if this section of the Ordinance is not preempted,

the Ordinance nevertheless fails because it impermissibly delegates power given to

the City under Article XI, Section 5 of the Texas Constitution to TCEQ by

incorporating by reference specific rules promulgated by TCEQ and codified in the

Administrative Code that implement the TWA and TCAA. See ORD. § 21-163(a).

The Group argues that such a delegation of legislative power violates the Texas

Constitution’s separation of powers clause which states:

The powers of the Government of the State of Texas shall be divided

into three distinct departments, each of which shall be confided to a

30

separate body of magistracy, to wit: Those which are Legislative to

one; those which are Executive to another, and those which are

Judicial to another; and no person, or collection of persons, being of

one of these departments, shall exercise any power properly attached

to either of the others, except in the instances herein expressly

permitted.

TEX. CONST. art. II, § 1. The Group argues that the City cannot delegate to any

third party—even the TCEQ—the power to make unilateral changes to the City’s

Code of Ordinances without any action on the part of the city council. In the

seminal “nondelegation doctrine” case, Texas Boll Weevil Eradication Foundation,

Inc. v. Lewellen, the Texas Supreme Court cautioned that the doctrine “should be

used sparingly” and that courts should consider delegations of authority narrowly

to uphold their validity whenever possible. 952 S.W.2d 454, 475 (Tex. 1997).

The Group cites to Desoto Wildwood Development, Inc. v. City of Lewisville,

184 S.W.3d 814, 826 (Tex. App.—Fort Worth 2006, no pet.) and Whittington v.

City of Austin, 174 S.W.3d 889, 900 (Tex. App.—Austin 2005, pet. denied) for the

general proposition that a city may not delegate the transaction of city business

except by resolution or ordinance. These cases, however, are distinguishable

because the courts in both cases were deciding whether statements made by an

agent of the city were binding upon the city. Desoto Wildwood Dev., Inc., 184

S.W.3d at 826 (developer sued city for breach of contract; court held that city

attorney’s statements in pre-suit letter to developer were not binding on city

31

because there was no evidence that city attorney had been authorized by city

council to act for it on this matter); Whittington, 174 S.W.3d at 900 (holding city,

which could only act through its governing body, failed to meet its summary

judgment burden in condemnation case because statements in city’s petition and

other pleadings were not conclusive proof that city’s governing body—as opposed

to its attorneys and other agents—determined to condemn property for public use).

The Group also directs us to a 1998 opinion of the Austin Court of Appeals

which addresses the constitutionality of the Texas Legislature’s alleged delegation

of authority to a federal administrative agency. See Ex parte Elliott, 973 S.W.2d

737, 741 (Tex. App.—Austin 1998, pet. ref’d). Elliott is also distinguishable. In

that case, although the court questioned the constitutionality of a state statute that

attempted to adopt future laws, rules, or regulations of the federal government, it

nevertheless side-stepped the question by concluding that the Texas Solid Waste

Disposal Act’s incorporation of the EPA’s definition of “hazardous waste” in the

federal Solid Waste Disposal Act was not a delegation of authority in violation of

the Texas Constitution’s separation of powers clause, but rather an incorporation

by reference. Id. at 742–43.

Neither the Group nor the City has directed us to—and we have not found—

any cases addressing the constitutionality of a home-rule city’s ordinance that

expressly incorporates state agency rules, as they currently exist, and as they may

32

be amended in the future. The Court of Criminal Appeals, however, has already

upheld the Legislature’s delegation of air-quality rulemaking and enforcement

authority to TCEQ. See State v. Rhine, 297 S.W.3d 301, 312–13 (Tex. Crim. App.

2008) (concluding that state legislature’s delegation of air-quality rulemaking and

enforcement authority to TCEQ, an executive agency, did not violate

non-delegation doctrine). TCEQ adopts rules (which are codified in Title 30 of the

Administrative Code) in order to implement those powers and duties delegated to it

by the Legislature. Here, the City is incorporating the air-pollution rules

promulgated pursuant to that lawful delegation, as amended, to ensure that the

Ordinance is consistent with state law on an ongoing basis. Otherwise, the city

council would have to amend the Ordinance each time a relevant portion of the

Administrative Code was amended, in order to maintain the consistency required

by the TCAA.

We conclude that the Group failed to show that the Legislature intended to

preempt the Ordinance with “unmistakable clarity,” and thus, failed to meet its

extraordinary burden to establish that the ordinance is invalid. See Turtle Rock

Corp., 680 S.W.2d at 805; Comeau, 633 S.W.2d at 792–93. We affirm the City’s

sole issue.

33

IV. Conclusion

We reverse the trial court’s judgment and render judgment in favor of the

City.

Jim Sharp

Justice

Panel consists of Justices Jennings, Higley, and Sharp.

34