AUSTIN – Attorney General Ken Paxton supported churches in the City of Magnolia as they defend their ability to have their day in court after the city decided to charge houses of worship and other nonprofits higher water rates than everyone else in the city. The churches argue the city’s new water rates for tax-exempt entities violate the Texas Religious Freedom Restoration Act (TRFRA) and other Texas law. The City of Magnolia initiated a lawsuit to declare the rates valid, but it did not provide notice to the churches despite the City’s awareness of the churches’ opposition.
“The City was fully aware of the churches’ complaints and questions of constitutionality yet attempted to prevent the churches from learning about the City’s lawsuit to declare the rates valid,” Attorney General Paxton said. “The churches are entitled to due process just like anyone else, and the City’s actions would prevent religious organizations from having their day in court.”
In August 2018, the City of Magnolia adopted a new rate ordinance setting fees for customers of its waterworks and sewer system, including a category for “Institutional/Non-Profit/Tax-Exempt” entities. Despite protests by the Texas Pastor Council and several notifications of intent to challenge the rates, the City set rates for the churches and other tax-exempt entities that exceed the rates charged to in-city commercial interests. In November 2018, it filed its bond validation suit without providing notice to the churches. Upon learning about the suit after judgment was entered, the churches moved for a new trial, which the Travis County District Court granted in August 2019 upon finding the churches’ due process rights had been violated.
