Texas Commission on Environmental Quality and Guadalupe-Blanco River Authority v. National Wildlife Federation

Affirmed and Opinion filed March 10, 2026.

In The

Fifteenth Court of Appeals

NO. 15-24-00050-CV

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY AND
GUADALUPE-BLANCO RIVER AUTHORITY, Appellants
V.

NATIONAL WILDLIFE FEDERATION, Appellee

On Appeal from the 98th District Court
Travis County, Texas
Trial Court Cause No. D-1-GN-20-007096

OPINION
The Texas Commission on Environmental Quality (TCEQ) and the
Guadalupe-Blanco River Authority (GBRA) appeal the district court’s judgment,
reversing and remanding a TCEQ order that granted a water-rights permit to
GBRA (the Order). Although we do not agree with all of the grounds on which the
district court relied, we conclude that (1) the Order is affected by error of law
because TCEQ erroneously interpreted Section 11.147(e-3) of the Water Code in
determining that it was not required to assess the effects of GBRA’s proposed
diversions of state water on fish and wildlife habitats, and (2) substantial rights of
the appellee, National Wildlife Federation (NWF), have been prejudiced as a
result. Consequently, we affirm the district court’s final judgment.

BACKGROUND
Surface water in Texas is owned by the state and held in trust for the public.
See Tex. Water Code §§ 11.021(a), .0235(a). The right to use state water may be
acquired by appropriation for certain purposes as prescribed by Chapter 11 of the
Water Code. See id. §§ 11.022, .023; see also id. § 5.013 (general jurisdiction of
TCEQ). The right to appropriate state water is acquired by applying for and
obtaining a permit from TCEQ. See id. § 11.121 (“[N]o person may appropriate
state water or begin construction on any work designed for the storage, taking, or
diversion of water without first obtaining permit from [TCEQ] to make the
appropriation.”). TCEQ may grant the permit only if the application complies
with certain procedural and substantive requirements. See id. §§ 11.124
(requirements for application to appropriate state water), .134 (action on
application). In part, the applicant must demonstrate that the appropriation is
sought for a beneficial use. See id. §§ 11.023, .134(3)(A).

In 2008, GBRA sought a water-rights permit from TCEQ in connection with
a project referred to by the parties as the Mid-Basin Water Supply Project.1
Specifically, GBRA sought to divert water at one or more points along a 37-mile
segment of the Guadalupe River (beginning near the city of Gonzales) for
municipal and industrial purposes. In addition, GBRA sought approval of a plan
to store some of the diverted water in “off-channel” reservoirs (meaning reservoirs
not on the watercourse) for use when adequate flows from the river are not
1
GBRA is a conservation and reclamation district, created by the Legislature in 1935, pursuant
to Article XVI, Section 59 of the Texas Constitution.

2
available. After receiving multiple requests for a contested-case hearing on the
application, TCEQ referred the matter to the State Office of Administrative
Hearings (SOAH). Some of the requestors, including NWF, were granted
affected-party status and participated in the administrative proceedings.

Following the SOAH hearing, the administrative law judges (ALJs) issued a
proposal for decision, recommending that TCEQ grant GBRA’s application. The
ALJs also recommended that (1) TCEQ’s Water Availability Division conduct an
additional environmental assessment of how construction and operation of the on-
watercourse diversion structure would impact fish and wildlife habitats, and
(2) TCEQ require GBRA to amend its permit before diverting any water to
specify the exact locations of the off-channel reservoirs and the diversion sites.

On September 1, 2020, TCEQ signed the Order, granting GBRA’s water-use
permit but rejecting the ALJ’s recommendations to conduct an additional
assessment of fish and wildlife habitats and to require additional location
information. The permit contained three authorizations: (1) the right to use and
divert 75,000 acre-feet of water per year from the Guadalupe River; (2) the right
to store up to 125,000 acre-feet of water in off-channel reservoirs in Gonzales
County; and (3) an “exempt inter-basin transfer authorization” to use water from
the Guadalupe River in nearby basins.

NWF timely filed a suit for judicial review. See Tex. Gov’t Code
§§ 2001.171, .176(a). After conducting a hearing on the merits, the district court
signed a final judgment, reversing the Order and remanding the matter to TCEQ
for further proceedings. The district court clarified in a letter to the parties the
reasoning for its ruling, stating that (1) TCEQ erred by failing to fully assess the
effects on fish and wildlife habitats from GBRA’s proposed diversions; (2) TCEQ
erred by failing to assess the effects of GBRA’s proposed off-channel reservoirs

3
on fish and wildlife habitats; (3) TCEQ’s approval of GBRA’s water-rights
application, which did not identify the location of the diversion points and
describe the proposed facilities, was arbitrary and capricious; and (4) the
substantial rights of NWF have been prejudiced as a result of TCEQ’s improper
administrative findings, inferences, conclusions, or decisions. TCEQ and GBRA
perfected this appeal, challenging each of the four grounds on which district court
relied.

STANDARD OF REVIEW

Judicial review of an administrative order following a contested-case
proceeding is governed by the substantial-evidence rule, which is found in Section
2001.174 of the Texas Administrative Procedure Act (APA). See Tex. Gov’t Code
§ 2001.174; see Mosley v. Texas Health & Human Servs. Comm’n, 593 S.W.3d
250, 258 (Tex. 2019) (explaining that APA is “generally applicable to all state
agencies and processes for judicial review of their decisions”). Under this rule, a
court must reverse or remand an agency decision if (1) “substantial rights of the
appellant have been prejudiced,” and (2) that prejudice is a result of
“administrative findings, inferences, conclusions, or decisions” that are

(A) in violation of a constitutional or statutory provision;
(B) in excess of the agency’s statutory authority;
(C) made through unlawful procedure;
(D) affected by other error of law;
(E) not reasonably supported by substantial evidence considering
the reliable probative evidence in the record as a whole; or
(F) arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion.

4
Tex. Gov’t Code § 2001.174.

Under the substantial-evidence rule, the agency’s findings, inferences,
conclusions, and decisions are presumed to be supported by substantial evidence,
and the burden is on the contestant to demonstrate otherwise. Texas Comm’n on
Env’t Quality v. Maverick Cnty, 642 S.W.3d 537, 547 (Tex. 2022); Upper Trinity
Reg’l Water Dist. v. Nat’l Wildlife Fed’n, 514 S.W.3d 855, 861 (Tex. App.—
Houston [1st Dist.] 2017, no pet.). Whether the contestant has met this burden is a
question of law, Dyer v. Texas Comm’n on Env’t Quality, 646 S.W.3d 498, 505
(Tex. 2022), and on review, we focus on the agency’s decision without deference
to the district court’s judgment, Texas Dep’t of Pub. Safety v. Alford, 209 S.W.3d
101, 103 (Tex. 2006) (per curiam).

To the extent our review requires us to interpret the Water Code and
administrative rules promulgated by TCEQ, these issues present questions of law,
which we address de novo. Maverick Cnty., 642 S.W.3d at 544 (citing Railroad
Comm’n of Tex. v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d
619, 624 (Tex. 2011)). Courts interpret agency rules using the same principles that
they apply when construing statutes. Maverick Cnty., 642 S.W.3d at 544. That is,
the court’s goal is to ascertain and give effect to the drafter’s intent, looking first to
the plain and common meaning of the text. Id. (citing TGS-NOPEC Geophysical
Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011)). Undefined terms are typically
given their ordinary meaning, unless a different or more precise definition is
apparent from the term’s use in the context of the statute. Greater Houston P’ship
v. Paxton, 468 S.W.3d 51, 58 (Tex. 2015). When an undefined term has multiple
common meanings, it is not necessarily ambiguous; rather, we will apply the
definition most consistent with the context of the regulatory scheme. Thompson v.
Texas Dep’t of Licensing & Regulation, 455 S.W.3d 569, 571 (Tex. 2014).

5
Further, we “generally uphold an agency’s interpretation of a statute it is charged
by the Legislature with enforcing, ‘so long as the construction is reasonable and
does not contradict the plain language of the statute.’” Texas Citizens for a Safe
Future and Clean Water, 336 S.W.3d at 625 (quoting First Am. Title Ins. Co. v.
Combs, 258 S.W.3d 627, 632 (Tex. 2008)).

DISCUSSION
Standing

The substantive issue in this appeal concerns whether the TCEQ’s decision
to grant the water-rights permit to GBRA is “affected by error of law” and,
relatedly, whether substantial evidence supports the TCEQ’s conclusion that
GBRA’s water-rights permit met the requirements for issuance under Chapter 11.
As a preliminary matter, however, we consider GBRA’s argument that NWF lacks
standing to seek judicial review of the TCEQ Order.2

Standing is a constitutional prerequisite to filing suit for both individuals and
associations, South Tex. Water Auth. v. Lomas, 223 S.W.3d 304, 307 (Tex. 2017),
focusing on whether the party has a sufficient relationship with the lawsuit so as to
have a “justiciable interest” in the outcome, Austin Nursing Center, Inc. v. Lovato,
171 S.W.3d 845, 848 (Tex. 2005). The requirement of standing derives from the
separation-of-powers doctrine and, in Texas, the open-courts provision. Lomas,

2
GBRA did not bring this challenge to NWF’s standing in the proceedings in district court.
Because standing implicates subject-matter jurisdiction, it may be raised for the first time on
appeal. Meyers v. JDC/Firethorne, Ltd., 548 S.W.3d 477, 484 (Tex. 2018); State v. Nonparty
Patient No.1, 720 S.W.3d 819, 827 (Tex. App.—15th Dist. 2025, no pet.). To resolve a
jurisdictional issue raised for the first time on appeal, we will construe the pleadings in favor of
the party asserting jurisdiction and, if necessary, review the record for evidence supporting
jurisdiction. RSL Funding LLC v. Pippins, 499 S.W.3d 423, 429 (Tex. 2016). To obtain a
dismissal without remand, GBRA must show that the existing pleadings and record demonstrate
an incurable jurisdictional defect. Id.

6
223 at 307. As to the separation-of-powers doctrine, the requirement of standing
ensures that the judiciary does not issue advisory opinions by deciding abstract
questions of law without binding the parties. Brown v. Todd, 53 S.W.3d 297, 302
(Tex. 2001). Consequently, standing requires “a concrete injury to the plaintiff and
a real controversy between the parties that will be resolved by the court.”
Heckman v. Williamson Cnty., 369 S.W.3d 137, 154 (Tex. 2012).

As a general rule, unless standing is conferred by statute, a plaintiff
challenging governmental action must demonstrate that it possesses a
particularized interest in the conflict, distinct from that sustained by the public at
large. Lomas, 223 S.W.3d at 307. In addition, when an association, like NWF,
seeks to pursue claims on behalf its members through “associational standing,” it
must demonstrate that at least one of its members would have standing as an
individual had they brought the claims in their individual capacity. 3 Abbott v.
Mexican American Legislative Caucus, 647 S.W.3d 681, 690 (Tex. 2022); Lomas,
223 S.W.3d at 308.

Under Section 2001.171 of the APA, a person is entitled to judicial review
of a state agency’s decision in a contested case if they are “aggrieved by [the] final
decision” and they have “exhausted all administrative remedies.” Tex. Gov’t Code
§ 2001.171 (emphasis added). Although the APA does not define “aggrieved,” the
Texas Supreme Court has recognized that the term “relate[s] to the requirement
that a person show a ‘justiciable interest’ in the contested matter.” Hooks v. Texas
Dep’t of Water Res., 611 S.W.2d 417, 419 (Tex. 1981) (noting that judicial-review

3
Specifically, the association must demonstrate that (1) its members would otherwise have
standing to sue in their own right, (2) the interests it seeks to protect are germane to the
organization’s purpose, and (3) neither the claim asserted nor the relief requested required the
participation of individual members in the suit. Texas Ass’n of Bus. v. Texas Air Control Bd.,
852 S.W.2d 440, 447 (Tex. 1993). Only the first element of associational standing is at issue in
this appeal.

7
provisions of Water Code “should be read in conjunction and harmony with” the
judicial-review provisions of APA); Texas Rivers Protection Ass’n v. Texas Nat.
Res. Conservation Comm’n, 910 S.W.2d 147, 151 (Tex. App.—Austin 1995, writ
denied). In other words, unless the party seeking judicial review is “aggrieved” by
the agency’s decision—meaning, the party has suffered a concrete and
particularized injury—the district court lacks jurisdiction over the suit. See City of
Galveston v. Flagship Hotel, Ltd., 319 S.W.3d 948, 952 (Tex. App.—Austin 2010,
pet. denied) (concluding that district court lacked jurisdiction over suit for judicial
review because party seeking review “[was] not aggrieved by TCEQ’s final
decision”). Consequently, although NWF’s standing in this case is conferred by
the APA, the scope of that statutory standing is coextensive with constitutional
standing.

In its petition for judicial review, NWF alleged that it is “a membership non-
profit corporation with a mission of uniting all Americans to ensure wildlife thrive
in a rapidly changing world.” NWF further alleged that one of its members owns a
fishing and seafood business on the San Antonio Bay, called “Chunky Monkey
Seafood.” According to NWF’s allegations, “because [Chunky Monkey
Seafood’s] business depends on the quantity and quality of freshwater flows into
the San Antonio Bay from the Guadalupe River, the impacts of changes to the
water shed and the flow of the Guadalupe River as a result of the issuance of the
Permit [by TCEQ] will directly affect [its] legal rights.” In other words, NWF
alleges that by authorizing GBRA to divert water from the Guadalupe River before
it reaches the San Antonio Bay, the TCEQ Order negatively impacts the volume of
freshwater flowing into the Bay and, in turn, negatively impacts the economic
interests of one of its members.

In addition, at the administrative hearing before SOAH to determine whether

8
NWF and other objectors met the definition of “affected person,” as required by
the Water Code for party participation in contested-case proceedings, the ALJs
heard testimony that the diversion sought by GBRA upstream from the San
Antonio Bay would affect conditions, including salinity, in the San Antonio Bay.4
As to NWF specifically, the owner of Chunky Monkey Seafood and NWF
member, Wesley Blevins, testified that he buys and sells a variety of seafood
products captured from the Bay, including flounder, shrimp, and oysters, and that
when the water levels of the Bay are low, he is unable to capture or purchase
seafood in the amounts necessary to sustain his business. Blevins also testified that
Chunky Monkey leases property on the Bay, which he uses as a location to
purchase seafood from other fishermen, which Chunky Monkey then distributes
around the country.

In challenging NWF’s standing to bring suit for judicial review, GBRA does
not dispute the truth of NWF’s economic-impact allegations. Instead, GBRA
asserts that for two independent reasons these allegations, even if true, are
insufficient to demonstrate that one of NWF’s members is “aggrieved” by the
TCEQ’s Order. First, GBRA contends that the specific issues raised by NWF in its
suit for judicial review do not directly concern the freshwater inflows at the San
Antonio Bay but instead relate to environmental impacts at the upstream diversion

4
TCEQ may not grant a request for a contested-case hearing “unless [it] determines that the
request was filed by an affected person as defined by Section 5.115 [of the Water Code]” or if it
determines that “the public interest warrants doing so.” Tex. Water Code § 5.556(c), (f)
(emphasis added). Section 5.115 of the Water Code provides that “affected person” means a
person “who has a justiciable interest related to a legal right, duty, privilege, power, or economic
interest affected by the administrative hearing. Id. § 5.115(a). An interest common to members
of the general public does not quality as a personal justiciable interest.” Id. Although the
definition of “affected person” incorporates the justiciable-interest requirement for constitutional
standing, affected-person status and standing are discrete issues. See Texas Comm’n on Env’t
Quality v. San Antonio Bay Estuarine Waterkeeper, 714 S.W.3d 270, 282-83 (Tex. App.—15th
Dist. 2025, pet. filed) (reviewing denial of affected-person status under substantial-evidence
rule).

9
points and off-channel-storage locations, whereas NWF’s alleged economic impact
relates only to the conditions at the Bay. Based on the plain language of Section
2001.171, we disagree with GBRA’s suggestion that NWF was required to
demonstrate for the purpose of standing that its named member is “aggrieved” by
the specific errors on which its challenges to the Order are based. Although the
issues raised by NWF relate to environmental impacts outside of the Bay, it raises
these issues as grounds for obtaining a reversal of TCEQ’s final decision to grant
GBRA’s water-rights Permit. Thus, the relevant jurisdictional inquiry is whether
NWF’s named member is “aggrieved” by the TCEQ’s decision to grant GBRA’s
request for a permit to appropriate water from the Guadalupe River.

Second, GBRA contends that NWF’s allegations are insufficient to support
standing because, in its view, Texas law does not recognize standing based on an
environmental interest, “absent a directly impacted interest in real property.” In
support of its argument, GBRA relies on cases from the Third Court of Appeals
that, according to GBRA, stand for the proposition that in the absence of a legal
right or interest in the property affected, an environmental or recreational impact,
by itself, is insufficient to confer standing. Save Our Springs All., Inc. v. City of
Dripping Springs, 304 S.W.3d 871, 882 (Tex. App.—Austin 2010, pet. denied)
(concluding that allegations of injury to environmental, scientific, or recreational
interests “without any interest in or connection to the real property involved” were
insufficient to demonstrate associational standing because there was “nothing to
distinguish [concerns of the association’s members] from the same concerns
experienced by the public in general”); Texas Rivers Protection Ass’n, 910 S.W.2d
at 151 (concluding that appellants had standing under Section 2001.171 to
challenge permit for diversion because their riparian ownership alone was
sufficient to “distinguish[] their injury from that of the public at large”). Applying

10
this rationale, GBRA contends that because NWF’s member does not possess a
legal interest in real property along the Guadalupe River, he has not suffered a
particularized injury sufficient to confer standing.

The case law on which GBRA relies is neither controlling nor persuasive in
this case. NWF’s asserted injury is that its member, Blevins, has suffered an
economic injury, unlike the environmental and recreational injuries asserted in the
cases before our sister court. Further, NWF has alleged and presented evidence
that this asserted injury arises from the fact that (1) Blevins relies directly on the
Bay for his business, and (2) the Bay, and in turn Blevins’ business, will be
negatively impacted by the appropriation of water requested by GBRA.
Consequently, Blevin’s economic injury is sufficiently particularized so as
distinguish it from that experienced by the general public. See Texas Rivers
Protection Ass’n, 910 S.W.2d at 15. Based on the undisputed allegations in
NWF’s petition concerning the potential economic impact of the proposed
diversion on Chunky Monkey Seafood, and the evidence in administrative record
before us, we conclude that NWF met its burden to affirmatively demonstrate that
it is “aggrieved” by the TCEQ Order that is the subject of its suit for judicial
review. See Tex. Gov’t Code § 2001.171; In the Interest of H.S., 550 S.W.3d 151,
155 (Tex. 2018) (noting that in evaluating standing courts construe the pleadings in
the plaintiff’s favor and also consider relevant evidence offered by parties).

Affected by Error of Law

Next, we consider the parties’ arguments concerning whether the TCEQ’s
conclusion that GBRA’s application met all procedural and substantive
requirements is supported by substantial evidence. Specifically, in two issues on
appeal, TCEQ and GBRA assert that the district court erred in concluding that
TCEQ was required to assess the effects of the proposed appropriation on fish and

11
wildlife habitats as a result of both the water diversion and the construction of the
off-channel reservoirs. The question we must consider in reviewing these issues is
whether TCEQ committed an “error of law” in construing the relevant statutes
such that the Order is not supported by substantial evidence. See Tex. Gov’t Code
§ 2001.174(2)(D).

“[T]he legislature has expressly required [TCEQ] while balancing all other
public interests to consider and, to the extent practicable, provide for the
freshwater inflows and instream flows necessary to maintain the viability of the
state’s streams, rivers, and bay and estuary systems in [TCEQ’s] regular granting
of permits for the use of state waters.” Tex. Water Code § 11.0235(c). Section
11.134 of the Water Code sets forth the requirements that must be met for TCEQ
to grant an application for a water-rights permit, which include factors outlined in
related provisions. Id. § 11.134 (“Action of Application”). In addition, if
applicable, the proposed appropriation must consider “the assessments performed
under Sections 11.147(d) and (e) [effects of permits on bays and estuaries and
instream uses] and Section[] . . . 11.152 [effects of permits on fish and wildlife
habitats].” Id. § 11.134(b)(3)(D). We will discuss each of these requirements in
turn and then attempt to reconcile them in response to the parties’ arguments,
including TCEQ and GBRA’s contention that the assessment under Section 11.152
is not required when an environmental flow standard is already in place. We begin
with Sections 11.147 and 11.152.

Under Section 11.147, when considering “an application for a permit to
store, take, or divert water, the [TCEQ] shall assess the effects, if any, of the
issuance of the permit on the bays and estuaries of Texas” and, in certain areas,
“include in the permit any conditions considered necessary to maintain beneficial
inflows to any affected bay and estuary system.” See Tex. Water Code

12
§ 11.147(b). In making this determination, TCEQ is required to consider certain
enumerated factors. See id. § 11.147(c)-(e). In part, under subsection (d), the
TCEQ must include in the permit, “to the extent practicable when considering all
public interests, those conditions considered by the [TCEQ] necessary to maintain
existing instream uses and water quality of the stream or river to which the
application applies.” Id. § 11.147(d). Under subsection (e), the TCEQ must
include in the permit, “to the extent practicable when considering all public
interests, those conditions considered by the [TCEQ] necessary to maintain fish
and wildlife habitats.” Id. § 11.147(e). Of import here, in determining what
conditions to include in the permit under subsection (e), “the [TCEQ] shall
consider any assessment performed under Section 11.152.” Id. § 11.147(e).
Separately, Section 11.152 states:

In its consideration of an application for a permit to store, take, or
divert water in excess of 5,000 acre feet per year, the [TCEQ] shall
assess the effects, if any, on the issuance of the permit on fish and
wildlife habitats and may require the applicant to take reasonable
actions to mitigate adverse impacts on such habitat.

Id. § 11.152.

In 2007, as part of Senate Bill 3, the Legislature amended the Water Code to
create a basin-by-basin process for developing recommendations to meet instream
needs as well as freshwater inflows to affected bays and estuaries. See id.
§ 11.1471. Under Section 11.1471, titled “Environmental Flow Standards and Set-
Asides,” the TCEQ is required to adopt by rule “environmental flow standards for
each river basin and bay system in this state that are adequate to support a sound
ecological environment, to the maximum extent reasonable considering other

13
public interests and other relevant factors.” 5 See id. In addition, under Section
11.134, any proposed appropriation of state water must now consider “any
applicable environmental flow standards established under Section 11.14741.” Id.
§ 11.134(b)(3)(D). Against the backdrop of this statutory scheme, we now turn to
the parties’ interpretation of these provisions and how they apply to the requested
permit.

Throughout the underlying administrative proceedings, and now in this
appeal, the parties have disagreed as to whether TCEQ was required under Section
11.152 to conduct a site-specific analysis of the effects of GBRA’s proposed
diversions on fish and wildlife habitats. Specifically, NWF asserts that TCEQ’s
Order is not supported by substantial evidence because TCEQ failed to assess the
effects of the proposed diversion on fish and wildlife habitats and that this
assessment is required by Section 11.134 and Section 11.147(e). Conversely,
TCEQ and GBRA argue that when environmental flow standards are adopted for a
particular basin (as they have been for the Guadalupe River Basin), it should
consider and apply those standards instead of conducting a site-specific
environmental analysis.6 See 30 Tex. Admin. Code § 298.360 (Tex. Comm’n on
Env’t Quality, Findings). In its adopted findings of fact and conclusions of law,
the TCEQ found that the proposed permit “properly applies and implements the
TCEQ’s instream flow standards for the Guadalupe River” and “properly applies
and implements the TCEQ’s freshwater inflow standards for the San Antonio
Bay.” Thus, in the view of TCEQ and GBRA, TCEQ was not required to conduct

5
The Water Code defines “environmental flow standards” as “those requirements adopted by
[TCEQ] under Section 11.1471.” Tex. Water Code § 11.002(17). “Environmental flow
analysis” means the application of a scientifically derived process for predicting the response of
an ecosystem to changes in instream flows or freshwater inflows. Id. § 11.002(15).
6
The environmental flow standards for the Guadalupe River Basin are found in Chapter
298, Subchapter E, of Title 30 of the Texas Administrative Code.

14
a separate assessment of the site-specific impact of the proposed diversions from
the Guadalupe River on fish and wildlife habitats because it applied the basin’s
environmental flow standard instead.

In support of its argument, the TCEQ and GBRA rely on Section 11.147,
subsection (e-3), which was added as part of Senate Bill 3. This provision states:

Notwithstanding Subsection (b)-(e), for the purpose of determining
the environmental flow conditions necessary to maintain freshwater
inflows to an affected bay and estuary system, existing instream uses
and water quality of a stream or river, or fish and aquatic wildlife
habitats, the [TCEQ] shall apply any applicable environmental flow
standard . . . adopted under Section 11.1471 instead of considering the
factors specified by those subsections.

Id. § 11.147(e-3) (emphasis added). Focusing on the “instead of” language, TCEQ
and GBRA assert that when an environmental flow standard is adopted, subsection
(e) and, by cross-reference, Section 11.152 do not apply and that, consequently, a
site-specific assessment of effects fish and wildlife habitats is not required. In
other words, in TCEQ’s view, site-specific assessments “have been
programatically replaced by the adoption of environmental flow standards for the
[Guadalupe River Basin].” In contrast, NWF focuses on the phrase “for the
purpose of determining the environmental flow conditions necessary to maintain
. . . fish and aquatic wildlife habitats.” According to NWF, under this language,
the adoption of an environmental flow standard displaces Section 11.152 only to
the extent the standard bears on the environmental flow conditions necessary to
maintain fish and aquatic wildlife habitats.

We conclude that, under the plain language of Section 11.147, subsection (e-
3), the application of an adopted environmental flow standard relieves the TCEQ

15
from its duty to perform an assessment under Section 11.152 but only “for the
purpose of determining environmental flow conditions necessary to maintain”
certain conditions, including “fish and aquatic wildlife habitats.” This
interpretation is consistent with Section 11.134, which suggests that Section 11.152
may be applicable even when an environmental flow standard has been adopted.
See id. § 11.134(b)(3)(D) (stating that proposed appropriation must “consider[] any
applicable environmental flow standards established under 11.1471 and, if
applicable, the assessment[] performed under Section[] . . . 11.152” (emphasis
added)).

In addition, contrary to the broad interpretation urged by TCEQ and GBRA,
this interpretation does not render a portion of the language in subsection (e-3)
meaningless. When interpreting a statute, we read the statute contextually to give
effect to every word, clause, and sentence. See Fort Worth Transp. Auth. v.
Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018). “As a general principle, we eschew
constructions of a statute that render any statutory language meaningless or
superfluous.” City of Dallas v. TCI W. End, Inc., 463 S.W.3d 53, 57 (Tex. 2015).
Under the broad interpretation urged by TCEQ and GBRA, everything in
subsection (e-3) after “Notwithstanding Subsection (b)-(e)” and before “the
[TCEQ] shall apply” is unnecessary and superfluous. Under their construction, if
an environmental flow standard exists for a basin, as it does here, then the factors
in subsections (b)-(e) do not apply. They ignore the language in between the two
clauses, which we cannot do.

Moreover, we presume that the legislature deliberately chose to use the
phrase “fish and aquatic wildlife habitats” in subsection (e-3), as opposed to the
phrase “fish and wildlife habitats,” as is used in Section 11.152, and that these
phrases have different meanings. See Texas Mut. Ins. Co. v. Ruttier, 381 S.W.3d

16
430, 452 (Tex. 2012) (explaining that court “presumes the Legislature deliberately
and purposefully selects words and phrases it enacts, as well as deliberately and
purposefully omits words and phrases it does not enact”). Consequently, if
GBRA’s proposed diversion would impact “fish and aquatic wildlife habitats” for
reasons unrelated to environmental flow or would impact non-aquatic “wildlife
habitats,” TCEQ must conduct an assessment under Section 11.152. To the extent
TCEQ has construed Section 11.147(e-3) to mean that it is never required to
conduct a site-specific assessment under Section 11.152 when an environmental
flow standard has been adopted for the river basin at issue, TCEQ committed an
error of law, as the district court correctly concluded. 7

In a separate but related issue, TCEQ and GBRA argue that even if an
assessment of fish and wildlife habitats may be required as a result of the diversion
facilities on the Guadalupe River, an assessment is not required as to the storage
reservoirs because the reservoirs and its impacts, if any, are located entirely off the
watercourse. TCEQ and GBRA point out that Chapter 11 does not require nor
authorize TCEQ to dictate specifics as to how water will be stored after its
diversion from the watercourse, except as it relates to the viability of the
appropriation’s intended beneficial use. Conversely, NWF contends that the Water
Code requires TCEQ to assess the environmental impacts of both the proposed
diversion and the off-channel reservoirs and that TCEQ violated its statutory
authority by granting GBRA’s water-use permit without doing so.

7
In Conclusion of Law 28A, the TCEQ states:
The Legislature has effectively made the majority of the Texas Water Code
[Section] 11.152 review a part of the broader fish and wildlife instream uses
review in Texas Water Code [Section] 11.147(e), and Texas Water Code
[Section] 11.147(e-3) substitutes these broader fish and wildlife reviews during
the permit process with the environmental flows rulemaking for those protections
once the [TCEQ] adopts those rules for a river basin.

17
As previously discussed, Chapter 11 provides a mechanism whereby a party
may acquire by appropriation the right to use water belonging to the state. See
Tex. Water Code §§ 11.021.-.0235. And, at least in some circumstances, the
TCEQ must assess the effects of the “issuance of a permit” on fish and wildlife
habitats. Id. § 11.152. Similarly, Rule 297.53 states that the TCEQ must assess
the effects, if any, “of the granting of the application on fish and wildlife habitat.”
30 Tex. Admin. Code § 297.53 (Tex. Comm’n on Env’t Quality, Habitat
Mitigation). This assessment “must include the project site as well as potentially
impacted habitat upstream, adjoining, and downstream of the project site.” Id.
§ 297.53(c).

Based on the plain language of the statute, and consistent with Rule 297.53,
we agree that an assessment of the effects of an application for water rights on fish
and wildlife habitats is limited to the site of the proposed appropriation (whether
by storing, taking, or diverting from the watercourse), as well as any potentially
impacted habitats “upstream, adjoining, and downstream” from the site of
appropriation. Here, there is no dispute that GBRA sought and TCEQ granted
permission for GBRA to divert 75,000 acre feet per year from the Guadalupe River
and to then store some of the diverted water in “off-channel reservoirs.” While the
initial diversion of the water from the watercourse could trigger an assessment
under Section 11.152, the subsequent storage of diverted water in reservoirs is not,
itself, an appropriation, and there is no evidence that the reservoirs are located at
the appropriation site or in an area “upstream, adjoining, [or] downstream” from
the site. Consequently, the TCEQ did not commit an error of law in concluding
that it was not required to assess of the effects of the off-channel reservoirs on fish
and wildlife habitats.

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Substantial Rights

Next, we consider the TCEQ and GBRA’s argument that the district court
erred in concluding that NWF’s “substantial rights . . . have been prejudiced” by
the TCEQ findings and conclusions that are the basis of its complaints, as required
for reversal by Section 2001.174 of the APA. In Dyer v. Texas Commission on
Environmental Quality, the Texas Supreme Court explained that it is not enough
for an agency’s findings and conclusions to be “faulty as a matter of law,” but
“they must also prejudice the substantial rights” of the party challenging them.
646 S.W.3d at 514. But “prejudic[ing] the substantial rights” of a party does not
mean that a party must show individualized harm, such as in an analysis of whether
a party has standing. Rather, the substantial-rights prong effectively requires the
reviewing court to conduct a harm analysis. AEP Tex. Com. & Indus. Retail, Ltd.
P’ship v. Pub. Util. Comm’n of Tex., 436 S.W.3d 890, 914 (Tex. App.—Austin
2014, no pet.); see Tex. R. App. P 44.1(a) (standard for reversible error). Findings
that are improper do not require reversal if they are unnecessary, so long as the
agency’s necessary findings are supported by substantial evidence. Dyer, 646
S.W.3d at 514. “An improper, but superfluous, finding does not prejudice the
substantial rights of the appellant.” Id.

In this case, we have determined that TCEQ erred in interpreting Section
11.147, subsection (e-3). Specifically, TCEQ erred in concluding that under
Section 11.147, when an environmental flow standard is adopted for a basin, a
permit for water rights from that basin may be granted without having to assess the
effects of the proposed diversion on fish and wildlife habitats, as is otherwise
required by Section 11.152. Thus, the relevant inquiry as it relates to the
substantial-rights prong is whether this error of law caused TCEQ to improperly
grant GBRA’s permit or, instead, whether other conclusions and findings

19
supported by substantial evidence support TCEQ’s determination that a fish-and-
wildlife-habitat assessment was not required in this case, despite its erroneous
interpretation of subsection (e-3).

Neither TCEQ nor GBRA explain, and we fail to see, how the TCEQ’s
findings of fact and conclusions of law otherwise support a determination that a
fish-and-wildlife assessment was not required in this case. That is, there are no
findings or conclusions establishing that any impact of the proposed diversions on
fish and aquatic wildlife habitats relates solely to environmental flow conditions
and that the proposed diversions would not impact non-aquatic wildlife habitats.
Instead, the record shows that the TCEQ’s decision to grant GBRA’s requested
water-rights permit without first assessing the effects of the permit on fish and
wildlife habitats at the proposed diversion points was a result of TCEQ’s erroneous
interpretation of Section 11.147, subsection (e-3). Thus, TCEQ’s error of law
prejudiced NWF’s substantial rights. See Tex. Gov’t Code § 2001.174.

Applying Section 2001.174 of the APA, we affirm the district court’s
decision to reverse the TCEQ Order and to remand the cause to TCEQ for further
proceedings. In those proceedings, the TCEQ should reconsider, in light of our
decision, whether site specific assessments of the proposed diversion’s effects on
fish and wildlife habitats are required in this case and make any necessary findings
of fact and conclusions of law to support its decision.

Alleged Application Defects

Finally, we consider TCEQ and GBRA’s argument that the district court
erred in concluding that “TCEQ’s approval of a water rights application that did
not identify the location and described the proposed facilities was arbitrary and

20
capricious.” 8 Id. § 2001.174(2)(F); see Charter Med.-Dallas, 665 S.W.2d at 454
(“In enacting the [Texas Administrative Procedure and Register Act], it is clear
that the legislature intended to distinguish between agency action that is not
supported by substantial evidence and agency action that is arbitrary and
capricious.”). Section 11.124 of the Water Code specifies that an application for a
water-rights permit must include certain information. Tex. Water Code § 11.24.
Relevant here, the application “state the location and describe the proposed
facilities,” and be “accompanied by map or plat.” Id. §§ 11.24(a)(5), .125.
Similarly, TCEQ Rule 295.7 states that “the application shall state the location of
point(s) of diversion and, if applicable, the location of dam(s) or off-channel
storage reservoirs.” 30 Tex. Admin. Code § 295.7 (Tex. Comm’n on Env’t
Quality, Location of Diversion Point, Reservoir, and Dam) .

Here, there is no dispute that GBRA did not identify specific diversion
points in its application. GBRA instead identified a 37-mile stretch of the
Guadalupe River from which it would divert at one or more points (referred to by
the parties as a “diversion reach”), and submitted maps depicting the proposed
diversion segment. TCEQ argues that the location and description of the proposed
facilities provided by GBRA was sufficient to allow the TCEQ to conduct a “full
legal and technical analysis” and that the applicable statutes and rules do not
require “exact precision in identifying the location of the facilities.”

Although the term “location” is not defined in the Water Code, we agree that
the term “location” in Section 11.124, when considered in the context of Chapter

8
An agency’s decision is arbitrary if it (1) fails to consider a factor that the legislature directs it
to consider; (2) considers an irrelevant factor; or (3) weighs only relevant factors that the
legislature directs it to consider but still reaches a completely unreasonable result. Public Util.
Comm’n v. Texas Indus. Energy Consumers, 620 S.W.3d 418, 427 (Tex. 2021).

21
11 of the Water Code, as a whole, means information regarding the location of the
diversion sufficient to allow TCEQ to analyze the impact of the proposed
appropriation, including on bays and estuaries. See Texas Citizens for a Safe
Future & Clean Water, 336 S.W.3d at 628 (noting that courts “generally avoid
construing individual provisions of statue in isolation from the statute as a whole”).
Nevertheless, we need not decide whether TCEQ’s decision to accept GBRA’s 37-
mile diversion reach without requiring additional location information was
arbitrary and capricious. We have concluded that, based on an incorrect statutory
interpretation, TCEQ did not properly consider whether fish-and-wildlife-habitat
assessments should be conducted at the proposed diversion sites. In addition, we
have concluded that the case should be remanded to the TCEQ for it to reconsider
that issue under the statute as correctly interpreted by this Court. If TCEQ
concludes that site-specific assessments are necessary in this case, it should also
consider whether additional information regarding the proposed diversion locations
is necessary for the purpose of conducting those assessments.

CONCLUSION
We affirm the district court’s judgment on the ground that TCEQ committed
an error of law by concluding it was not required to analyze the effects of GBRA’s
proposed diversions on fish and wildlife habitats before granting GBRA’s water-
rights permit and that the substantial rights of NWF have been prejudiced as a
result. See Tex. Gov’t Code § 2001.174. On remand, TCEQ should determine
whether an assessment of the effects on fish and wildlife habitats is required under
the facts presented in this case and, if so, whether the additional information
regarding the location of the proposed diversion sites is necessary for conducting
that assessment.

22
/s/Scott K. Field
Scott K. Field
Justice

Panel consists of Chief Justice Brister and Justices Field and Farris

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