No.

________
In the Supreme Court of Texas
EX PARTE: THE CITY OF IRVING, TEXAS

On Petition for Review from the Court of Appeals for the Fifth District of Texas at Dallas No. 05-11-00036-CV CITY OF IRVINGS PETITION FOR REVIEW

Charles R. Anderson State Bar No. 01170500 Office of the City Attorney 825 West Irving Boulevard Irving, Texas 75060 972.721.2541 972.721.2750 (facsimile) canderson@cityofirving.org Lisa Bowlin Hobbs State Bar No. 24026905 VINSON & ELKINS LLP 2801 Via Fortuna, Suite 100 Austin, Texas 78746 512.542.8593 512.236.3275 (facsimile) lhobbs@velaw.com

Michael L. Raiff State Bar No. 00784803 GIBSON DUNN & CRUTCHER LLP 2100 McKinney Avenue Dallas, TX 75201 214.698.3350 214.571.2927 (facsimile) mraiff@gibsondunn.com

E. Ray Hutchison State Bar No. 10352000 Thomas S. Leatherbury State Bar No. 12095275 Marc A. Fuller State Bar No. 24032210 VINSON & ELKINS LLP 2001 Ross Ave., Suite 3700 Dallas, Texas 75201 214.220.7792 214.999.7792 (facsimile) tleatherbury@velaw.com rhutchison@velaw.com mfuller@velaw.com Attorneys for City of Irving August 15, 2011

IDENTITY OF THE PARTIES AND COUNSEL Petitioners City of Irving, Texas Trial and Appellate Counsel Michael L. Raiff Gibson, Dunn & Crutcher LLP 2100 McKinney Avenue Dallas, TX 75201-6912 214.698.3350 214.571.2927 (fax) E. Ray Hutchison Thomas S. Leatherbury Robert R. Collins III Julie Melton Partain Marc A. Fuller Vinson & Elkins LLP 2001 Ross Avenue, Suite 3700 Dallas, TX 75201 214.220.7700 214.999.7792 (fax) Lisa Bowlin Hobbs Vinson & Elkins LLP 2801 Via Fortuna, Suite 100 Austin, Texas 78746 512.542.8593 512.236.3275 (fax) Charles R. Anderson, City Attorney Office of the City Attorney 825 West Irving Blvd. Irving, TX 75060 972.721.2541 972.721.2750 (fax)

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Respondent/Plaintiff The Office of the Attorney General of Texas

Trial and Appellate Counsel David J. Schenck David C. Mattax Jennifer S. Jackson Office of the Attorney General of Texas P.O. Box 12548 Austin, TX 78711-2548 512. 936.1342 512.936.0545 (fax)

Intervenors Las Colinas Group, LP Frank L. Branson Eric T. Stahl Law Offices of Frank L. Branson, P.C. 4514 Cole Avenue, Suite 1800 Dallas, TX 75205 214.522.0200 214.521.5485 (fax) Mikel J. Bowers Bell Nunnally & Martin LLP 3232 McKinney Avenue, Suite 1400 Dallas, TX 75204-2429 214.740.1400 214.740.1499 (fax) Robert D. Martinez Cotton, Schmidt & Abbott, LLP 550 Bailey Avenue, Suite 600 Fort Worth, TX 76107 817.338.4500 817.338.4599 (fax) John F. Boyle, Jr. Boyle & Lowry, L.L.P. 4201 Wingren, Suite 108 Irving, TX 75062-2763 972.650-1700 972.650.7105 (fax)

B Concessionaire-Las Colinas, LLC

Greater Irving-Las Colinas Chamber of Commerce

Dallas County Utility and Reclamation District

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Pro Se Intervenors

Thomas Blakewell Steve Bronner James W. Cassels Cousins Properties Services LLC Teresa E. Crow Gables Residential Hines Las Colinas L and LP Irving Convention and Visitors Bureau Carl Klinke Jacky Knox Clementine C. Lear Danny Opitz Nancy Optiz Mel Robinson Robert N. Stewart Carlton E. Turner, Ph.D., D.SC. Rob Witte

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Amicus Curiae City of Dallas Christopher B. Bowers Barbara E. Rosenberg Assistant City Attorneys Office of the City Attorney City of Dallas, Texas 7BN Dallas City Hall 1500 Marilla Street Dallas, Texas 75201

City of San Antonio

Michael D. Bernard City Attorney P.O. Box 839966 San Antonio, Texas 78283 210.207.8940 210.207.4004 (fax) Thomas K. Spurgeon McCall, Parkhurst & Horton L.L.P. 700 N. St. Marys, Suite 1525 San Antonio, Texas 78205 210.225.2800 210.225.2984 (fax) Robert G. Newman Rosemarie Kanusky Fulbright & Jaworski L.L.P. 300 Convent, Suite 2100 San Antonio, Texas 78205 210.270.7138 210.270.7205 (fax)

Petitioners in No. 11-0168 Joe Putnam and the Irving Taxpayers Opposed to Illegal and Wasteful Use of Tax Money

Trial and Appellate Counsel James B. Harris Scott P. Stolley Richard B. Phillips, Jr. Thompson & Knight LLP One Arts Plaza 1722 Routh Street, Suite 1500 Dallas, TX 75201-2533 214.969.1700 214.969.1751 (fax)

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TABLE OF CONTENTS IDENTITY OF THE PARTIES AND COUNSEL ...........................................................ii TABLE OF CONTENTS ............................................................................................... vii INDEX OF AUTHORITIES ........................................................................................... ix RECORD REFERENCES............................................................................................... xi STATEMENT OF THE CASE ......................................................................................xii STATEMENT OF JURISDICTION ............................................................................. xiv STATEMENT OF ISSUES PRESENTED..................................................................... xv STATEMENT OF FACTS............................................................................................... 1 A. B. The Citys Proposed Project and the Proposed Bonds. ................................ 1 The City Files a Declaratory Judgment Action under Chapter 1205, and the Trial Court Enters Final Judgment in the Citys Favor. ......................................................................................................... 1 The Court of Appeals Reverses in Part, but Fails to Answer the Legal Question of Whether the State Is a Governmental Body. ........................................................................................................ 2 In the Wake of the Court of Appeals Decision, the City Is Unable to Determine the Final Financial Structure of its Proposed Bonds.......................................................................................... 3

C.

D.

SUMMARY OF THE ARGUMENT ............................................................................... 4 ARGUMENT AND AUTHORITIES............................................................................... 6 I. By Declining to Answer Whether the State Is a Governmental Body, the Court Abrogated its Duty under Chapter 1205 to Determine All Legal Questions in the Case and Placed the City in an Intolerable Dilemma.............................................................................................. 6 The State Is Plainly a Governmental Body under Section 2303.5055 of the Government Code. ........................................................ 9 A. B. The Plain Meaning of Governmental Body Includes the State. .......................................................................................................... 9 The Doctrines of Ejusdem Generis and Noscitur a Sociis Do Not Require a Narrower Construction....................................................... 12
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II.

C.

Neither The Legislative History Nor the Overall Structure of Chapter 2303 Supports Limiting Governmental Body to Local Governments. ................................................................................. 13

CONCLUSION.............................................................................................................. 15 APPENDIX A: B: C: D: Ex Parte City of Irving, No. 05-11-00036-CV, 2011 WL 1902210 (Tex. App. Dallas May 20, 2011, pet. filed) Final Judgment TEXAS GOVERNMENT CODE 1205.021, .025, .065, .068 TEXAS GOVERNMENT CODE 2303.502, .503, .504, .505, .5055

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INDEX OF AUTHORITIES CASES Albertsons, Inc. v. Sinclair, 984 S.W.2d 958 (Tex. 1999) ........................................................................................9 Doyle v. State, 148 S.W.3d 611 ((Tex. App.Austin 2004, pet. refused) .......................................... 12 Ex Parte City of Irving, No. 05-11-00036-CV, 2011 WL 1902210 (Tex. App.Dallas May 20, 2011, pet. filed) ........................................................................................................................ 3, 7 Hotze v. City of Houston, 339 S.W.3d. 809 (Tex. App.Austin 2011, no pet.) ....................................................8 In re Estate of Nash, 220 S.W.3d 914 (Tex. 2007) ...................................................................................... 12 Monsanto Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937 (Tex. 1993) ...................................................................................... 11 Smith v. Wortham, 157 S.W. 740 (Tex. 1913) .......................................................................................... 13 United States v. Mescall, 215 U.S. 26 (1909) ..................................................................................................... 13 STATUTES TEX. AG. CODE 41.052................................................................................................ 10 TEX. EDUC. CODE 62.003(2) ....................................................................................... 10 TEX. ELEC. CODE 251.001........................................................................................... 10 TEX. FIN. CODE 14.063 ............................................................................................... 10 TEX. FIN. CODE 16.010 ............................................................................................... 10 TEX. GOVT CODE 1205.021(2) .....................................................................................6 TEX. GOVT CODE 1205.021(2)(F) ................................................................................6 TEX. GOVT CODE 1205.025(2) .....................................................................................6 TEX. GOVT CODE 1205.065(1) .....................................................................................7 TEX. GOVT CODE 2009.002........................................................................................ 10 TEX. GOVT CODE 2252.091........................................................................................ 10 TEX. GOVT CODE 2303.502........................................................................................ 14 TEX. GOVT CODE 2303.503........................................................................................ 14 TEX. GOVT CODE 2303.504........................................................................................ 14
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TEX. GOVT CODE 2303.505.................................................................................. 14, 15 TEX. GOVT CODE 2303.5055............................................................................... passim TEX. GOVT CODE 2303.5055(a) ............................................................................... 7, 9 TEX. GOVT CODE 311.005(13) ................................................................................... 12 TEX. GOVT CODE 311.011(a) .......................................................................................9 TEX. GOVT CODE 311.016(2).......................................................................................7 TEX. GOVT CODE 33.030 ........................................................................................... 10 TEX. GOVT CODE 391.003 ......................................................................................... 10 TEX. GOVT CODE 401.011(g) ..................................................................................... 10 TEX. GOVT CODE 436.054(b)..................................................................................... 10 TEX. GOVT CODE 551.001(3)..................................................................................... 10 TEX. GOVT CODE 552.003(1)(A)............................................................................ 9, 10 TEX. GOVT CODE 559.001 ......................................................................................... 11 TEX. GOVT CODE 573.042 ......................................................................................... 10 TEX. GOVT CODE 614.003 ......................................................................................... 10 TEX. GOVT CODE 659.002(c) ..................................................................................... 11 TEX. HUM. RES. CODE 115.004 ................................................................................... 10 TEX. SPEC. DIST. CODE 8842.102(b) ........................................................................... 10 TEX. TAX CODE 151.027(c)(7) .................................................................................... 10 TEX. TRANSP. CODE 456.001(2) .................................................................................. 11 TEX. TRANSP. CODE 458.001(4) .................................................................................. 11 OTHER AUTHORITIES C.S.H.B. 2001, 75th Leg., Reg. Sess., 7 ....................................................................... 14

RECORD REFERENCES In this petition, the following record citation forms will be used: Clerks Record (Vols. 16) will be cited as [volume]CR[page]. Reporters Record (Vols. 14) will be cited as 1RR.[page], when referencing the transcript of the hearing on September 27, 2010, and 3RR.[page], when referencing the transcript of the hearing on October 4, 2010. The Citys trial exhibits will be cited as PX[number].

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STATEMENT OF THE CASE Nature of the Case: Petitioner the City of Irving (City) filed a declaratory judgment suit under the Expedited Declaratory Judgment Act, Chapter 1205 of the Texas Government Code (Act or Chapter 1205), seeking validation of proposed bonds to finance the construction of an Entertainment and Hotel Project to complement its new convention center. Hon. Craig Smith, 192nd Judicial District Court, Dallas Co., Texas. After a two-day trial, the City and the Attorney General of Texas (Attorney General) filed separate motions for final judgment. Although the Attorney General did not object to most of the declaratory relief requested in the Citys proposed final judgment, the Attorney General argued that: (1) certain of the revenues the City proposed to pledge as security for the proposed bonds were subject to biennial appropriation by the Legislature and (2) the Texas Comptroller could not refund the States portion of the mixed beverage tax to the Citys proposed Project because the State was not a governmental body under Section 2303.5055 of the Texas Government Code. 6CR1277-78. The trial court agreed with the City on both legal questions and entered Final Judgment in the Citys favor. 6CR1281-87 (attached at App. B). Fifth Court of Appeals; Opinion by Justice Lang-Miers, joined by Justice ONeill and Justice Lang. Ex Parte City of Irving, No. 0511-00036-CV, 2011 WL 1902210 (Tex. App.Dallas May 20, 2011, pet. filed) (attached at App. A). Affirmed in part, reversed in part, and remanded. The Attorney General appealed the Final Judgment on both legal issues. As to the biennial appropriation question, the court of appeals held that the revenues the City proposed to pledge as security for the proposed bonds were not subject to biennial appropriation by the Legislature. The court of appeals did not answer the mixed beverage question, however, holding instead that the City was not entitled to pledge the States portion of the mixed beverage tax because there was no evidence in the record of a written agreement by the State to refund its portion of the mixed beverage tax.

Trial Court: Trial Courts Disposition:

Court of Appeals:

Court of Appeals Disposition:

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Other Appeal Arising from Trial Court Proceedings

This is the second appeal from the trial proceedings in this case. In the first appeal, the court of appeals upheld the trial courts dismissal of two Opposing Intervenors under Section 1205.104 of the Act for failing to post a security bond. See Putnam v. City of Irving, 331 S.W.3d 869 (Tex. App.Dallas 2011, pet. filed). The Opposing Intervenors filed a petition for review in this Court. See No. 11-0168. Despite having been dismissed from the proceedings, the Opposing Intervenors have improperly tried to participate in this second appeal. The court of appeals correctly refused to consider the issues raised in their appellate brief because they [were] not properly before [the] Court. Id. at 1 n.1. Moreover, there is no reason for this Petition to be considered together with the Opposing Intervenors petition in No. 11-0168. The petition in No. 11-0168 presents the question of the proper standard for imposing a security bond on an opposing intervenor in a Chapter 1205 case, whereas this Petition does not concern the security bond provisions under Chapter 1205. The Opposing Intervenors petition in No. 11-0168 assumes that the City is not entitled to pledge the States portion of the mixed beverage tax, and the Citys response to that petition shows that, even if the court of appeals ruling on the mixed beverage issue is correct, the City still obtained substantially the judgment it sought in the case, which is the standard under Chapter 1205s security bond provisions.

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STATEMENT OF JURISDICTION This Court has jurisdiction under Sections 22.001(a)(3), (4), and (6), as well as Section 1205.068(d), of the Texas Government Code.

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STATEMENT OF ISSUES PRESENTED The City of Irving brought this case under Chapter 1205 of the Texas Government Code, which gives governmental issuers of bonds the statutory right to obtain judicial resolution of legal questions relating to proposed bonds, before the bonds are issued. One of the legal questions in this case is whether the State is a governmental body under Section 2303.5055 of the Texas Government Code and therefore has the authority to refund its portion of the mixed beverage tax to the City, which has proposed to pledge these revenues as security for its bonds. The trial court resolved this governmental body issue in favor of the City, but the court of appeals declined to decide the issue. Instead, it held that there was no record evidence of an agreement by the State to refund these tax revenueseven though the reason why there is no such agreement in the record is that the State does not believe it is a governmental body. This Petition seeks review of that decision and presents the following issues: 1. Did the court of appeals disregard a statutory obligation to determine . . .

each legal question raised in this bond validation suit when it refused to resolve the governmental body issue? 2. Is the State a governmental body under the plain meaning of

Section 2303.5055 of the Texas Government Code? 3. [unbriefed] Assuming the State is a governmental body under Section

2303.5055 of the Texas Government Code, is the City required to have an agreement with the State in order to receive a refund of the States portion of the mixed beverage tax, and, if so, what form must such an agreement take?

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STATEMENT OF FACTS A. The Citys Proposed Project and the Proposed Bonds.

Last year, the City of Irving completed construction of a $135 million convention center. 1RR.100. To enhance the new convention center and to distinguish it from competing venues, the City is planning an Entertainment and Hotel Project (Project), adjacent to the convention center. 1RR.109. The proposed Project, which will be funded by public and private investment, will include a boutique hotel, performance hall, restaurants, outdoor stages, promenades, and parking facilities. 1RR.108-09; 1RR.121. The City currently anticipates issuing three series of bonds, totaling approximately $200 million in net proceeds (Bonds). 1RR.121. These proposed Bonds would be secured by revenues from various potential sources (Potential Pledged Revenues), including both local and state tax revenues, such as State sales and use taxes, State mixed beverage taxes,1 State hotel taxes, City sales and use taxes, City parking taxes, City ticket taxes, City mixed beverage taxes, City hotel taxes, and rent payments from the Projects tenant. 1RR.129-141; PX23,25. These plans are not final. Rather, the current bond ordinances are draft ordinances, as the City is still working through the final financial structure of the proposed Bonds. 1RR.124; PX17-18. B. The City Files a Declaratory Judgment Action under Chapter 1205, and the Trial Court Enters Final Judgment in the Citys Favor.

The final financial structure of the Bonds will depend on which of the Potential

As background, the State imposes a 14% mixed beverage tax. The State retains a portion of these tax revenues and remits a portion to the City. 1RR.137.

Pledged Revenues the City is allowed to pledge as security for them. To resolve this issue, the City sought a declaratory judgment under the Expedited Declaratory Judgment Act, Chapter 1205 of the Texas Government Code. 1CR1. In addition to the Potential Pledged Revenues described above, the City requested judicial validation of various agreements, ordinances, and approvals relating to its proposed financing plan and the proposed expenditures of bond proceeds. 1CR23-24. As a mandatory party under the Act, the Attorney General appeared in the case, raising two legal objections to the Citys proposed declaratory judgment: (1) whether the State Project Taxes and the City Mixed Beverage Tax were subject to biennial appropriation by the Texas Legislature and (2) whether the State was a governmental body under Section 2303.5055 of the Texas Government Code and therefore had the authority to refund its portion of the mixed beverage tax to the City.2 6CR1277. After a two-day trial, the trial court considered additional briefing by the Attorney General and the City on these two questions. It agreed with the City on both of them, entering Final Judgment in the Citys favor. 6CR1281. C. The Court of Appeals Reverses in Part, but Fails to Answer the Legal Question of Whether the State Is a Governmental Body.

The Attorney General raised the same two issues on appeal as in the trial court. The court of appeals affirmed the judgment in large part, granting the City substantially the judgment it had originally requested in its petition. As to the biennial appropriation
2

The Attorney General did not challenge any other part of the relief requested in the Citys petition, including the various other Potential Pledged Revenues, the validity of the Citys 2007 Election approving the project, the Lease Agreement, and Development Agreement.

question, it held that none of the Potential Pledged Revenues was subject to biennial appropriation by the Legislature. See Ex Parte City of Irving, 2011 WL 1902210, at *24. But although the issue was squarely presented to the court in the parties briefing, the court of appeals did not answer the legal question of whether the State is a governmental body under Section 2303.5055, and therefore has the authority to refund the States portion of the mixed beverage tax to the City. Instead, the court held that there was not any evidence in the record of an actual agreement between the State and the City. Id., at *6. D. In the Wake of the Court of Appeals Decision, the City Is Unable to Determine the Final Financial Structure of its Proposed Bonds.

By not deciding the legal question of whether the State is a governmental body under Section 2303.5055 of the Texas Government Code, the court of appeals ruling puts the City in an untenable position. In order to determine a final financial structure for the bonds, the City must know which revenues are available to repay them. But with regard to the States portion of the mixed beverage tax, the City cannot move forward with the Comptroller, given that the Comptroller does not believe that she has the legal authority to refund the States portion of the mixed beverage taxbecause she does not think the State is a governmental body. And that is precisely the legal question that the court of appeals declined to answer. Unable to determine a final financial structure for the Bonds, the City cannot draft its final bond ordinances, much less obtain City Council approval of them. It cannot obtain a rating for the Bonds, because that process involves an analysis of the total

revenues pledged to the repayment of the bonds. 3RR.193. It cannot conduct a final feasibility study. 3RR.192-93. And the City cannot make necessary changes to the Project or its financing, e.g., by changing certain design details for the Project or adjusting the relative amounts of private and public investment, because it does not know how much money will be available for bond repayments. In short, even after having prevailed on every other issue, the City has been denied the legal certainty necessary to finalize its proposed Bonds. SUMMARY OF THE ARGUMENT Normally, a court of appeals opinion that relies on an evidentiary matter to avoid a legal issue might not deserve this Courts attention. In most cases, the court of appeals has no statutory duty to decide all of the legal questions raised in a case. And courts are understandably reluctant to decide issues of first impression. But bond validation cases are different. The Expedited Declaratory Judgment Act expressly commands the trial court to determine each and every legal question raised in the case, and the court of appeals has the same obligation. Indeed, the very purpose of the Act is to allow government bond issuers like the City of Irving to obtain judicial resolution of legal questions affecting the validity of proposed bonds when they are just thatproposed bonds. Thus, it is customary for an issuer to file suit under the Act before obtaining all of the approvals that are required for the bonds actually to issue. After all, the entire purpose of filing a bond validation case is to obtain judicial resolution of legal questions so that the final financial structure can be determined and necessary approvals and agreements obtained.

The court of appeals decision, if left uncorrected, threatens to deprive all government bond issuers of the most important benefits of the Act by (1) burdening them with procedural formalities never contemplated by the Act, and (2) raising the possibility that, even after an issuer incurs the expense of bringing and litigating a bond validation suit in the trial court, a court of appeals will leave key legal questions unanswered and therefore deny the issuer the legal assurances required to determine a final financial structure for the proposed bonds. In essence, the Expedited Declaratory Judgment Act would no longer be what it is todaya vital tool for the efficient resolution of all legal questions affecting proposed public bonds. The City of Irvings current predicament illustrates the harmful effect of the court of appeals decision. The City has been told by the court of appeals that it cannot get judicial resolution of whether the Comptroller has the legal authority to refund State mixed beverage tax revenues because the City has not yet secured an agreement from the Comptroller for such a refund. But the Comptroller has stated that she does not think she has the legal authority to enter into such an agreement. The City respectfully disagrees with the Comptroller on this legal question, but only a court can say who is correct, and the court of appeals declined to answer that question. By granting this Petition, the Court will not only help the City resolve this dilemma but also assure bond issuers across the State that the judiciary, if requested, will serve the role the Legislature has given it under Chapter 1205 to resolve disputes about the validity and legality of public securities.

Finally, had the court of appeals discharged its statutory duty and decided the legal question presented here, it should have held that the State is, in fact, a governmental body within the meaning of the applicable statute, Section 2303.5055 of the Texas Government Code, and may therefore refund its portion of the mixed beverage tax. As the trial court properly determined, the plain meaning of governmental body includes the State and its agencies, and none of the Attorney Generals arguments justifies a departure from that plain meaning. In short, the court of appeals should have decided this legal questionand decided it in the Citys favor. ARGUMENT AND AUTHORITIES
I.

By Declining to Answer Whether the State Is a Governmental Body, the Court Abrogated its Duty under Chapter 1205 to Determine All Legal Questions in the Case and Placed the City in an Intolerable Dilemma. The Expedited Declaratory Judgment Act gives cities like Irving the statutory right

to obtain judicial resolution of legal questions relating to proposed bonds. TEX. GOVT CODE 1205.021(2) (An issuer may bring an action under this chapter to obtain a declaratory judgment as tothe legality and validity of each [proposed bond]). These specifically include any legal questions relating to the pledge . . . of a tax [or] revenue . . . to secure the public securities. TEX. GOVT CODE 1205.021(2)(F).

Importantly, the Act expressly provides that a city like Irving may bring the declaratory judgment action before . . . the public securities are authorized, issued, or delivered. TEX. GOVT CODE 1205.025(2) (emphasis added). Indeed, that is the primary purpose of the Act: to obtain a legal determination as to all questions relating to a proposed bond issuance before the bonds are finally approved by the issuer and sold to the market. For

this reason, the Act imposes a duty on the trial court to determine each legal question raised in the case. TEX. GOVT CODE 1205.065(1) (The court shall . . . hear and determine each legal . . . question in the declaratory judgment action.) (emphasis added); TEX. GOVT CODE 311.016(2) (Shall imposes a duty.). Of course, the same duty extends to the court of appeals. Otherwise, the bond issuer ends up in the same situation as before the action was fileduncertain as to legal questions relating to the proposed bonds. Here, the court of appeals disregarded its statutory duty to determine a legal question raised by the Attorney General, namely whether the State has the authority to refund its portion of the mixed beverage tax to the City. This question requires an interpretation of Section 2303.5055 of the Texas Government Code, which provides that a governmental body, including a municipality, county, or political subdivision, may agree to rebate, refund, or pay such tax revenues to the owner of a qualifying hotel project (like the City). TEX. GOVT CODE 2303.5055(a) (emphasis added). The

Attorney General argued that the State was not a governmental body within the meaning of the statute, and therefore the Comptroller was not authorized to refund such taxes. See, e.g., 6CR1277. But rather than answer this question, the court of appeals demurred and held instead that there was no evidence in the record of an agreement by the State or Comptroller. See Ex Parte City of Irving, 2011 WL 1902210, at *6. In doing so, the court of appeals put the City in an untenable positionunable to move forward with the Comptroller because the Comptroller does not believe that she has

the legal authority to refund such taxes, yet also unable to get a judicial determination of whether, in fact, the Comptroller is correct on this point of law. Such a result is

fundamentally at odds with the requirement under the Expedited Declaratory Judgment Act that the court hear and determine each legal . . . question in the case, as well as the whole purpose of the Act itselfto quickly and efficiently resolve legal issues that affect the validity of proposed bonds. See Hotze v. City of Houston, 339 S.W.3d. 809, 814 (Tex. App.Austin 2011, no pet.) (The Legislature enacted the [Act] to provide issuers of public securities . . . a method of quickly and efficiently adjudicating the validity of public securities and acts affecting those public securities.). The court of appeals requirement of a formal agreement by the Comptroller before it resolves the underlying legal question ignores the reality of bond practice. There are nearly always agreements, approvals, and other formalities that must occur before the bonds actually issue. As the Citys financial advisor explained at trial, it is normal and customary for an issuer to seek judicial validation prior to completing these necessary steps. 3RR.186-89. As in this case, it may not be feasible or advisable to finalize these mattersconducting necessary financial analyses, obtaining credit ratings, securing final approval from the City Counciluntil the legality of all the potential revenue streams are judicially validated. 3RR.189. But the court of appeals decision inverts this necessary order and, in doing so, contravenes the express command and clear purpose of the Act. The Court should grant this petition and emphasize to the courts of appeals the importance of their role in actually and fully resolving all legal issues that

may be clouding the financing of projects local governments (and their constituents) have proposed and developed.
II.

The State Is Plainly a Governmental Body under Section 2303.5055 of the Government Code. If the court of appeals had reached the question of whether the State is a

governmental body under Section 2303.5055it should have answered yes.3 The plain language of the statute demands this affirmative answer, and nothing in the legislative history or the structure of Chapter 2303 of the Texas Government Code gives the Court any compelling reason to depart from the terms plain meaning. A. The Plain Meaning of Governmental Body Includes the State.

Statutory interpretation begins with the plain language of the statute. Albertsons, Inc. v. Sinclair, 984 S.W.2d 958, 960 (Tex. 1999) (per curiam). Courts must construe words and phrases according to the rules of grammar and common usage. TEX. GOVT CODE 311.011(a). Here, the common meaning and usage of the term governmental body is clear, and it includes both state and local government entities. Under Texas law, this ends the inquiry. Because the State and its agencies are clearly governmental bodies, Section 2303.5055 applies to them. A review of Texas statutes further confirms the term governmental body is not understood by the Legislature to be so limited. For example, Section 552.003(1)(A) of

As noted above, Section 2303.5055 of the Texas Government Code provides, in relevant part, that a governmental body, including a municipality, county, or political subdivision, may agree to rebate, refund, or pay such tax revenues to the owner of a qualifying hotel project (here, the City). TEX. GOVT CODE 2303.5055(a) (emphasis added).

the Texas Government Code defines governmental body to include both (i) a board, commission, department, committee, institution, agency, or office that is within or is created by the executive or legislative branch of state government and that is directed by one or more elected or appointed members and (iii) a municipal governing body in the state. TEX. GOVT CODE 552.003(1)(A) (emphasis added). And the Texas Tax Code incorporates that definition of governmental body. TEX. TAX CODE 151.027(c)(7). Similarly, in other state legislation, the term governmental body is used as a generic term, which does not specify either local or state bodies.4 Indeed, when the

Legislature has intended to limit a statute to either local or state governmental bodies, it has done so by expressly referring to either a local governmental body or state governmental body, instead of relying on the generic, broader term.5 Here, the
4

See, e.g., TEX. AG. CODE 41.052 (commodity producers boards are state agencies and governmental bodies for purposes of Public Information Act); TEX. FIN. CODE 14.063 (Office of Consumer Credit is governmental body); TEX. FIN. CODE 16.010 (Texas Department of Banking and other state financial agencies are governmental bodies); TEX. GOVT CODE 33.030 (State Commission on Judicial Conduct entitled to cooperation of any state or local government body or department); TEX. GOVT CODE 401.011(g) (inaugural committee for Governor and Lieutenant Governor is governmental body); TEX. GOVT CODE 436.054(b) (Texas Military Preparedness Commission is governmental body); TEX. GOVT CODE 551.001(3) (Public Information Act) (defining governmental body to include (A) a board, commission, department, committee, or agency within the executive or legislative branch of state government that is directed by one or more elected or appointed members); TEX. GOVT CODE 573.042 (anti-nepotism rules apply to any governmental body to which a candidate, as defined by TEX. ELEC. CODE 251.001, may seek election, e.g., the Comptroller); TEX. GOVT CODE 614.003 (peace officers entitled to legislative leave to serve in, appear before, or petition a governmental body during a regular or special session of the body, which includes leave to appear before the United States Congress (Sec. 614.009)); TEX. GOVT CODE 2009.002 (directing all governmental bodies in the State, including State agencies, to develop alternative dispute resolution procedures); TEX. HUM. RES. CODE 115.004 (Governors Committee on People with Disabilities is governmental body); TEX. SPEC. DIST. CODE 8842.102(b) (allowing groundwater district to contract with a state agency or another governmental body); see also TEX. GOVT CODE 2252.091 (governmental entity means a state agency or a political subdivision of the state). See, e.g., TEX. EDUC. CODE 62.003(2) (noting that the board of regents of a state university is a state governmental body); TEX. GOVT CODE 391.003 (requiring support of locally elected governmental
5

(contd)

10

Legislature could have easily used the narrower term local governmental body in Section 2303.5055 if that had been its intent. It did not, and its actual use of the broader, generic term should be dispositive of this issue. See Monsanto Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937, 939 (Tex. 1993) (refusing to imply a meaning to state beyond its plain and ordinary meaning, concluding [s]uch implication is forbidden when, as here, the legislative intent may be determined from a reasonable interpretation of the statute as written). The Attorney General has not identified a single Texas statute in which the term governmental body refers solely to a local governmental body, without expressly saying so. Rather, the Attorney General relies on certain Texas statutes, including

Chapter 2303 of the Texas Government Code, which expressly refer to the governing body of a municipality. The Attorney General then argues that the unmodified term governmental body either inherently means local governmental body or, at least, is ambiguous. This does not logically follow. The fact that the Legislature sometimes modifies the term governmental body to include only local governmental bodies (just as it sometimes modifies governmental body to include only state governmental bodies) only proves that the generic, broader term governmental body (as it appears in

body); TEX. GOVT CODE 559.001 (defining state governmental body as a governmental body as defined by Section 552.003 that is part of state government); TEX. GOVT CODE 659.002(c) (authorizing Comptroller to determine the priority of deductions for compensation paid by a state governmental body); TEX. TRANSP. CODE 456.001(2) (noting that a designated recipient of highway funds can include a local governmental body); TEX. TRANSP. CODE 458.001(4) (defining urban transit districts as a local governmental body . . . that operates a public transportation system in high population areas).

11

Section 2303.5055) includes both local and state governmental bodies. B. The Doctrines of Ejusdem Generis and Noscitur a Sociis Do Not Require a Narrower Construction.

The Attorney General has relied heavily on the related doctrines of ejusdem generis and noscitur a sociis to defend his unduly narrow interpretation of the term governmental body. These doctrines are sometimes used to narrow a general term based on other terms that appear in the same statutory provision. But any reliance on them to limit the term governmental body here is misplaced. First and foremost, Texas law is clear that reliance on any doctrine of statutory construction is inappropriate where, as here, the statute is unambiguous. See, e.g., In re Estate of Nash, 220 S.W.3d 914, 917 (Tex. 2007) (If a statute is clear and unambiguous, we apply its words according to their common meaning without resort to rules of construction or extrinsic aids.); Doyle v. State, 148 S.W.3d 611, 614 (Tex. App. Austin, 2004, pet. refused) (rejecting use of ejusdem generis and noscitur a sociis to limit an unambiguous term, tamper and instead look[ing] to the common meaning of the oft-used term). Moreover, to the extent that any extrinsic aid is necessary, the Legislature has expressly stated that the terms [i]ncludes and including are terms of enlargement and not of limitation or exclusive enumeration, and use of the terms does not create a presumption that components not expressed are excluded. 311.005(13). TEX. GOVT CODE

The Attorney Generals interpretation ignores the plain meaning of

governmental body and the Legislatures clear instructions regarding how to interpret the term including.

12

The Attorney General also misconstrues the doctrines themselves. One of the fundamental limitations of ejusdem generis (and the related doctrine of noscitur a sociis) is that enumerated specific examples may not be used to wholly supplant the general term. See, e.g., Smith v. Wortham, 157 S.W. 740, 742 (Tex. 1913) (doctrine has no application where the specific words exhaust the class of objects referred to); see United States v. Mescall, 215 U.S. 26, 31-32 (1909) (Whilst [the doctrine of ejusdem generis] is aimed to preserve a meaning for the particular words, it is not intended to render meaningless the general words.). In other words, even if the specific examples suggest some limit to the scope of a general term, the general term must still be given a meaning that is broader than the enumerated examples. See Smith, 157 S.W. at 742. But the Attorney Generals application of the doctrine disregards this fundamental limitation, taking one of the enumerated examples (political subdivision) to render the general term (governmental body) superfluous. C. Neither The Legislative History Nor the Overall Structure of Chapter 2303 Supports Limiting Governmental Body to Local Governments.

The Attorney General relies heavily on legislative history and the purported structure of Chapter 2303, but neither justifies a departure from the plain meaning of governmental body. First, just as reliance on doctrines of statutory construction is inappropriate in light of the clear meaning of the term governmental body, so, too, is reliance to legislative history. Nevertheless, the Attorney General relies on legislative history, which omits at least one compelling piece of history. Specifically, in 1997, the Senate attempted to amend Section 2303.5055 by limiting the eligible taxes that could

13

be recovered under the statute. In place of the current language, which refers generally to mixed beverage taxes, the Senate amendment would have further limited the term to mixed beverage taxes payable to a county or municipality under Section 183.051. C.S.H.B. 2001, 75th Leg., Reg. Sess., 7 (available at phrase

www.legis.state.tx.us/tlodocs/75R/billtext/html/HB02001S.htm)

(underlined

proposed as an amendment). If the statute were already limited to local governmental bodies, as the AG contends, there would have been no need for the Senate to propose this amendment. Second, the Attorney Generals structural argument is equally unpersuasive. A comparison of Section 2303.5055 with the other provisions within Chapter 2303 demonstrates that Section 2303.5055 should not be limited to local governmental bodies. Sections 2303.502 and 2303.503, for example, are expressly limited to state agencies. Section 2303.504 is expressly limited to state tax refunds and credits. In turn, Section 2303.505 is expressly limited to local sales and use tax refunds. Yet, Section 2303.5055 contains no express limitation to either local or state bodies. These sections of the statute that immediately precede Section 2303.5055 show that the Legislature knew how to limit the scope of a provision to either state or local governmental bodies if that was its intent. The contrast between Section 2303.5055 and Section 2303.505 goes further. Both sections are structured similarly, allowing appropriate governmental bodies to refund taxes in order to encourage development. Yet, when it comes to identifying the

14

appropriate governmental bodies, the two sections are markedly different. Instead of using the generic term governmental body, Section 2303.505 repeatedly uses the specific term governing body of a municipality or county. Similarly, instead of

generically referring to taxes, Section 2303.505 repeatedly specifies that it applies to local sales and use taxes. If the Legislature had intended Section 2303.5055 to be similarly limited, it could have easily said so through clear language like the language that Section 2303.505 employs. CONCLUSION For the foregoing reasons, this Court should grant this Petition for Review and reverse the portion of the court of appeals judgment that held that the State may not refund its portion of the mixed beverage taxes to the City, affirm the judgment as to all other grounds, and render judgment in the Citys favor. The City also requests any and all further relief to which it is entitled.

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Respectfully submitted,

Charles R. Anderson State Bar No. 01170500 Office of the City Attorney 825 West Irving Boulevard Irving, Texas 75060 972.721.2541 972.721.2750 (facsimile) canderson@cityofirving.org Lisa Bowlin Hobbs State Bar No. 24026905 VINSON & ELKINS LLP 2801 Via Fortuna, Suite 100 Austin, Texas 78746 512.542.8593 512.236.3275 (facsimile) lhobbs@velaw.com

/s/ Thomas S. Leatherbury Michael L. Raiff State Bar No. 00784803 GIBSON, DUNN & CRUTCHER LLP 2100 McKinney Avenue Dallas, TX 75201 214.698.3350 214.571.2927 (facsimile) mraiff@gibsondunn.com E. Ray Hutchison State Bar No. 10352000 Thomas S. Leatherbury State Bar No. 12095275 Marc A. Fuller State Bar No. 24032210 VINSON & ELKINS LLP 2001 Ross Ave., Suite 3700 Dallas, Texas 75201-2975 214.220.7700 214.999.7705 (facsimile) tleatherbury@velaw.com mfuller@velaw.com

Attorneys for City of Irving

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CERTIFICATE OF SERVICE

I certify that on the 15th day of August, 2011, the foregoing Petition for Review was served by certified mail on the following counsel of record: David J. Schenck OFFICE OF THE ATTORNEY GENERAL P.O. Box 12548 Austin, TX 78711 Tel: (512) 936-1342 Fax: (512) 936-0545 Attorneys for the Attorney General Attorneys for Las Colinas Group, LP James B. Harris Richard B. Phillips, Jr. THOMPSON & KNIGHT LLP One Arts Plaza 1722 Routh Street, Suite 1500 Dallas, Texas 75201-2533 Tel: 214-969-1700 Fax: 214-969-1751 Attorneys for Joe Putnam and Irving Taxpayers Opposed to Illegal and Wasteful Use of Tax Money Mikel J. Bowers BELL NUNNALLY & MARTIN LLP 3232 McKinney Avenue, Suite 1400 Dallas, TX 75204 Tel: (214) 740-1400 Fax: (214) 740-1499 Attorneys for B ConcessionaireLas Colinas, LLC Robert D. Martinez COTTON SCHMIDT & ABBOTT, LLP 550 Bailey Avenue, Suite 600 Fort Worth, TX 76107 Tel: (817) 338-4500 Fax: (817) 338-4599 Attorneys for Greater Irving-Las Colinas Chamber of Commerce Frank L. Branson Eric T. Stahl LAW OFFICES OF FRANK L. BRANSON, P.C. 4514 Cole Avenue, Suite 1800 Dallas, TX 75205 Tel: (214) 522-0200 Fax: (214) 521-5485

Rosemarie Kanusky FULBRIGHT & JAWORSKI L.L.P. 300 Convent, Suite 2100 San Antonio, TX 78205 Tel: (210) 270-7138 Fax: (210) 270-7205 Attorneys for the City of San Antonio

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Christopher D. Bowers CITY ATTORNEYS OFFICE 1500 Marilla Street, Room 7B North Dallas, TX 75205 Tel: (214) 670-3519 Fax: (24) 670-0622 Attorneys for the City of Dallas
/s/ Marc A. Fuller Marc A. Fuller

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US 1003304v1

APPENDIX

App. A
Court of Appeals Opinion

Page 1 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas))

Only the Westlaw citation is currently available. Court of Appeals of Texas, Dallas. Ex Parte CITY OF IRVING, Texas. No. 051100036CV. May 20, 2011. Rehearing Overruled June 29, 2011. Background: City brought declaratory judgment action regarding the legality and validity of city's proposed revenue bonds to finance the expansion of city's convention center. The 192nd Judicial District Court, Dallas County, entered judgment for city. Attorney General appealed. Holdings: The Court of Appeals, LangMiers, J., held that: (1) city's pledge of state sales, use, and hotel occupancy taxes, as security for repayment of city's proposed revenue bonds, was not subject to state constitutional biennial-appropriation requirement for funds held in the general revenue fund; (2) city's pledge of its refunded portion of mixed beverage taxes was not subject to state constitutional biennial-appropriation requirement for funds held in the general revenue fund; but (3) city could not, without state's written consent, pledge state's portion of mixed beverage taxes. Affirmed in part, reversed in part, and remanded. West Headnotes [1] Declaratory Judgment 118A 393

judgment action regarding legality and validity of city's proposed revenue bonds to finance the expansion of city's convention center, that tax revenues pledged by city to secure the bonds were subject to biennial appropriation by state legislature, and that Government Code did not authorize city to pledge state's portion of mixed beverage taxes, were at the very least tried by consent in trial court, and thus, Attorney General preserved the claims for appellate review; trial court held a hearing and rendered findings of fact and conclusions of law on those issues. Vernon's Ann.Texas Rules Civ.Proc., Rule 67. [2] Appeal and Error 30 893(1)

30 Appeal and Error 30XVI Review 30XVI(F) Trial De Novo 30k892 Trial De Novo 30k893 Cases Triable in Appellate Court 30k893(1) k. In General. Most Cited Cases Matters of statutory construction are reviewed de novo. [3] Statutes 361 181(1)

361 Statutes 361VI Construction and Operation 361VI(A) General Rules of Construction 361k180 Intention of Legislature 361k181 In General 361k181(1) k. In General. Most Cited Cases The primary objective in construing statutes is to give effect to the legislature's intent. [4] Statutes 361 181(2)

118A Declaratory Judgment 118AIII Proceedings 118AIII(H) Appeal and Error 118Ak392 Appeal and Error 118Ak393 k. Scope and Extent of Review in General. Most Cited Cases Attorney General's claims, in city's declaratory

361 Statutes 361VI Construction and Operation 361VI(A) General Rules of Construction 361k180 Intention of Legislature 361k181 In General

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Page 2 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) 361k181(2) k. Effect and Consequences. Most Cited Cases Statutes 361 188 [7] States 360 361 Statutes 361VI Construction and Operation 361VI(A) General Rules of Construction 361k187 Meaning of Language 361k188 k. In General. Most Cited Cases The plain meaning of the text is the best expression of legislative intent unless a different meaning is apparent from the context or the plain meaning leads to absurd results. [5] States 360 119 130

quirement for funds held in the general revenue fund. Vernon's Ann.Texas Const. Art. 3, 52a; Art. 8, 6.

360 States 360IV Fiscal Management, Public Debt, and Securities 360k129 Appropriations 360k130 k. Necessity. Most Cited Cases Enabling legislation need not expressly refer to state constitutional provision generally allowing state legislature to provide for creation of programs and the making of loans and grants of public money for public purposes of development and diversification of state's economy, in order for funds relating to such programs, loans, or grants to be excepted from state constitutional biennial-appropriation requirement for funds held in general revenue fund. Vernon's Ann.Texas Const. Art. 3, 52a. [8] States 360 130

360 States 360IV Fiscal Management, Public Debt, and Securities 360k119 k. Limitation of Use of Funds or Credit. Most Cited Cases State constitutional provision generally allowing state legislature to provide for creation of programs and the making of loans and grants of public money for public purposes of development and diversification of state's economy establishes an exception to state constitutional prohibition on the lending of public credit, by providing that programs fostering economic growth serve a public purpose. Vernon's Ann.Texas Const. Art. 3, 52a. [6] States 360 130

360 States 360IV Fiscal Management, Public Debt, and Securities 360k129 Appropriations 360k130 k. Necessity. Most Cited Cases State legislation creating an economic development program for qualified hotel projects, and authorizing the rebate of certain state taxes for period of ten years, was not subject to state constitutional biennial-appropriation requirement for funds held in the general revenue fund. Vernon's Ann.Texas Const. Art. 3, 52a; Art. 8, 6; V.T.C.A., Government Code 2303.003(8), 2303.504(a)(1); V.T.C.A., Tax Code 151.429(h). [9] Municipal Corporations 268 919

360 States 360IV Fiscal Management, Public Debt, and Securities 360k129 Appropriations 360k130 k. Necessity. Most Cited Cases State constitutional provision generally allowing state legislature to provide for creation of programs and the making of loans and grants of public money for public purposes of development and diversification of state's economy establishes an exception to the state constitutional biennial-appropriation re-

268 Municipal Corporations 268XIII Fiscal Matters 268XIII(C) Bonds and Other Securities, and Sinking Funds 268k919 k. Provision for Payment or Redemption of Bonds. Most Cited Cases

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Page 3 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) States 360 130 268XIII Fiscal Matters 268XIII(C) Bonds and Other Securities, and Sinking Funds 268k919 k. Provision for Payment or Redemption of Bonds. Most Cited Cases City could not, without state's written consent, pledge state's portion of mixed beverage taxes, as security for repayment of city's proposed revenue bonds to finance the expansion of city's convention center. V.T.C.A., Government Code 2303.003(8), 2303.504(a)(1), 2303.5055(a, c, e). On Appeal from the 192nd Judicial District Court, Dallas County, Texas, Trial Court Cause No. 10 11029.David C. Mattax, Jennifer Settle Jackson and David J. Schenck, for Attorney General. Mikel J. Bowers and Clay Lewis Jenkins, for B ConcessionaireLas Colinas. Charles R. Anderson, Michael L. Raiff, E. Ray Hutchison and Robert R. Collins III, for City of Irving. John F. Boyle, for Dallas County Utility and RECL. Robert D. Martinez, for Las Colinas Chamber of Irving. James B. Harris and Richard B. Phillips, for Joe Putnan/Irving Taxpayers. Frank L. Branson and Edward D. Burbach, for Las Colinas Group, LP. Karen Bailey Pettigrew, for Susan Combs and William S. Ham. Before Justices O'NEILL, LANG, and LANG MIERS. OPINION Opinion by Justice LANGMIERS. *1 The Attorney General of Texas appeals from the final judgment in a declaratory judgment action filed by the City of Irving, Texas pursuant to chapter 1205 of the government code relating to the issuance of public securities. See TEX. GOV'T CODE ANN.

360 States 360IV Fiscal Management, Public Debt, and Securities 360k129 Appropriations 360k130 k. Necessity. Most Cited Cases City's pledge of state sales, use, and hotel occupancy taxes, as security for repayment of city's proposed revenue bonds to finance the expansion of city's convention center, was not subject to state constitutional biennial-appropriation requirement for funds held in the general revenue fund. Vernon's Ann.Texas Const. Art. 3, 52a; Art. 8, 6; V.T.C.A., Government Code 2303.003(8), 2303.504(a)(1); V.T.C.A., Tax Code 151.429(h), 351.102. [10] Municipal Corporations 268 919

268 Municipal Corporations 268XIII Fiscal Matters 268XIII(C) Bonds and Other Securities, and Sinking Funds 268k919 k. Provision for Payment or Redemption of Bonds. Most Cited Cases States 360 130

360 States 360IV Fiscal Management, Public Debt, and Securities 360k129 Appropriations 360k130 k. Necessity. Most Cited Cases City's pledge of its refunded portion of mixed beverage taxes, as security for repayment of city's proposed revenue bonds to finance the expansion of city's convention center, was not subject to state constitutional biennial-appropriation requirement for funds held in the general revenue fund. Vernon's Ann.Texas Const. Art. 3, 52a; Art. 8, 6; V.T.C.A., Tax Code 183.021, 183.051(b). [11] Municipal Corporations 268 268 Municipal Corporations 919

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Page 4 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) 1205.001.152 (West 2000). We affirm in part and reverse in part and remand. BACKGROUND The City adopted a capital improvement plan for the expansion of its convention center. The plan includes the construction of an entertainment center and hotel. The City proposes to issue three series of municipal bonds in a total amount not to exceed $200 million to fund the construction of the project. See id. 1371.001.106 (West 2000 & Supp.2009). Among the revenue sources the City proposes to pledge to secure payment of the bonds are rebates of taxes that will be collected from within the project after it is opened for initial occupancy: state sales, use, and hotel occupancy taxes, and the State's portion and the City's portion of the mixed beverage taxes. In this action, the City sought a declaratory judgment stating that, among other things, the City has the authority to issue the public securities, the public securities are legal and valid, and the proposed pledges of revenues are legal and valid. The Attorney General, as a necessary party to the declaratory judgment action, see id. 1205.042, objected to the approval of the City's proposal because it did not include a statement that these revenue sources were subject to biennial appropriation by the legislature. He also objected to the City's proposal to pledge the State's portion of the mixed beverage taxes arguing that the City had no authority to pledge those taxes. [1] The trial court found in favor of the City and issued a final judgment validating the City's proposal to pledge the various revenue sources to secure payment of the bonds.FN1 The trial court also issued findings of fact and conclusions of law. On appeal, the Attorney General challenges those conclusions and contends that the trial court erred by ruling that (1) the taxes pledged by the City to fund the project are not subject to biennial appropriation by the state legislature and (2) the government code authorized the City to pledge the State's portion of the mixed beverage taxes.FN2 STANDARD OF REVIEW AND APPLICABLE LAW [2][3][4] The Attorney General's two issues involve matters of statutory construction, which we review de novo. See City of Garland v. Dallas Morn-

ing News, 22 S.W.3d 351, 357 (Tex.2000). Our primary objective in construing statutes is to give effect to the legislature's intent. Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex.2009). The plain meaning of the text is the best expression of legislative intent unless a different meaning is apparent from the context or the plain meaning leads to absurd results. See City of Rockwall v. Hughes, 246 S.W.3d 621, 62526 (Tex.2008); see also Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex.1999) ([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.). In construing a statute, we may consider the objective of the statute, its legislative history, and the consequences of a proposed construction. TEX. GOV'T CODE ANN. 311.023(1), (3), (5) (West 2005). BIENNIAL APPROPRIATION *2 In his first issue, the Attorney General argues that the trial court erred by concluding that the state taxes and the City's portion of the mixed beverage taxes are not subject to biennial appropriation.FN3 The Attorney General argues that because these taxes are required to be deposited into the general revenue fund, and because the Texas Constitution prohibits appropriations from the treasury for more than two years, the City's proposal to pledge these revenues for 10 years is unconstitutional. The City argues that the project falls within a constitutional exception to the biennial appropriation requirement. We agree with the City. State Sales, Use, and Hotel Occupancy Taxes We first address the Attorney General's contention in his first issue that the state sales, use, and hotel occupancy taxes are subject to biennial appropriation. We address his contention in his first issue that the mixed beverage taxes are subject to biennial appropriation later in this opinion. It is undisputed that the law requires the state sales, use, and hotel occupancy taxes to be deposited into the State's general revenue fund. See TEX. TAX CODE ANN. 151.801 (state sales and use taxes), 156.251(a) (state hotel occupancy taxes) (West 2008). It is also undisputed that the law allows the City to pledge these taxes for the first 10 years after the hotel is open for initial occupancy. See id.

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Page 5 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) 151.429(h) (stating tax rebates to which owner of qualified hotel project is entitled for first 10 years); 351.102(c) (West Supp.2010) (stating municipality may pledge funds described in section 151.429(h)). But the Attorney General argues that any pledge of the funds must be contingent on a legislative appropriation. He cites article VIII, section 6 of the Texas Constitution, which states: No money shall be drawn from the Treasury but in pursuance of specific appropriations made by law; nor shall any appropriation of money be made for a longer term than two years. TEX. CONST. art. VIII, 6. The City argues that article III, section 52a of the Texas Constitution is an exception to the biennial appropriation requirement and that its project falls within that exception. The parties do not dispute that section 52a exempts section 52a programs from the biennial appropriation requirement of article VIII, section 6; they dispute only whether section 52a applies here. Section 52a provides in relevant part: 52a. Assistance to encourage state economic development Sec. 52a. Notwithstanding any other provision of this constitution, the legislature may provide for the creation of programs and the making of loans and grants of public money, other than money otherwise dedicated by this constitution to use for a different purpose, for the public purposes of development and diversification of the economy of the state,.... Id. art. III, 52a. [5] As the Attorney General has stated in the past, section 52a was passed in 1987 and created an exception to the constitutional prohibition on the lending of public credit by providing that programs fostering economic growth serve a public purpose. TEX. ATT'Y GEN. OP. NO. JC0092, at 6, 8 (1999). Section 52a permits the legislature to enact legislation providing for economic development. Id.; TEX. CONST. art. III, 52a. He has also stated that section 52a is a broad authorization to create programs to promote economic development, and that it does not specify what the program must be as long as

the program serves the purpose of encouraging economic development. TEX. ATT'Y GEN. OP. NO. GA0529, at 2 (2007). *3 [6] The Attorney General argues that section 52a does not apply here because the taxes at issue in this case are deposited into the State's general revenue fund and section 52a applies only to funds that are held in trust by the comptroller and have not been deposited into the general revenue fund. We disagree. The Texas Supreme Court has held that when funds are held in trust, they are not considered part of the general revenue fund. See Friedman v. Am. Surety Co. of New York, 137 Tex. 149, 151 S.W.2d 570, 576, 57880 (Tex.1941) (excepting funds held in trust from appropriations limitation); Manion v. Lockhart, 131 Tex. 175, 114 S.W.2d 216, 21819 (Tex.1938) (same). These cases were decided well before the section 52a amendment was passed in 1987. Because funds held in trust by the comptroller are not deposited into the general revenue fund, there would be no reason to adopt a constitutional amendment exempting those funds from biennial appropriation. See Friedman, 151 S.W.2d at 576, 57880; Manion, 1141 S.W.2d at 21819. Instead, we conclude that section 52a was passed to provide an exception to the biennial appropriation requirement for funds that are held in the general revenue fund and that meet section 52a's requirement for programs to encourage economic development in the state. See TEX. CONST. art. III, 52a; Friedman, 151 S.W.2d at 57880; Manion, 114 S.W.2d at 21819. [7] The Attorney General also contends that section 52a does not apply here because the legislation must expressly invoke section 52a or expressly authorize either the extension of the State's credit or a governmental economic development program that will make loans or grants and that none of the statutes at issue here do so. We do not agree that the enabling legislation must expressly refer to section 52a as long as it is clear that the legislature created the program with the intent to encourage economic development. Additionally, section 52a states that the legislature may provide for the creation of programs and the making of loans and grants of public money ... for the public purposes of development and diversification of the economy of the state.... TEX. CONST. art. III, 6 (emphasis added). It does not state that the economic development program has to

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Page 6 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) make loans or grants of public money, as the Attorney General contends. See id. Acting under its authority in section 52a, the legislature has enacted statutes that created programs to encourage economic development by offering, among other things, tax incentives to eligible municipalities. For example, in enacting the Texas Enterprise Zone Act, a statute applicable to this case, the legislature saw a need to encourage the development, growth, and expansion of the private sector within depressed urban and rural areas of the state. FN4 Act of May 26, 1983, 68th Leg., R.S., ch. 841, 1, 1983 TEX. GEN. LAWS 4771, 477172 (current version at TEX. GOV'T CODE 2303.001.517 (West 2008 & Supp.2010)). The Texas Enterprise Zone Act authorized exemptions from certain local taxes and also offered state regulatory incentives. See id. at 478182, 114 S.W.2d 216. In 1987, the legislature amended the Texas Enterprise Zone Act to include rebates of state sales and use taxes. Act of May 31, 1987, 70th Leg., R.S., ch. 765, 1, 1987 TEX. GEN. LAWS 2720, 2720. In 1993, the legislature again amended the Texas Enterprise Zone Act and expanded it to include a qualified hotel project and a rebate of 100% of the state sales, use, and hotel occupancy taxes to the owner of a qualified hotel project for the first seven years after the hotel project is open for initial occupancy. Act of May 11, 1993, 73d Leg., R.S., ch. 231, 6, 10, 1993 TEX. GEN. LAWS 480, 48283. Two years later, the legislature expanded the rebate from the first seven years to the first ten years after the qualified hotel project is open for initial occupancy. Act of May 19, 1995, 74th Leg., R.S., ch. 977 1, 1995 TEX. GEN. LAWS 4867, 4868. See GOV'T 2303.003(8); TAX 151.429(h). *4 One of the purposes of the Texas Enterprise Zone Act, as expressly stated in the statute, is to induce private investment ... by removing unnecessary governmental regulatory barriers to economic growth and to provide tax incentives and economic development program benefits. GOV'T 2303.002. And a qualified hotel project falls within the Texas Enterprise Zone Act. Id. 2303.003(8). The legislature sought to encourage economic development when it enacted similar statutes that provide tax rebates to municipalities and authorized

municipalities to pledge those tax rebates to secure payment of bonds. See TAX 151.429 (Tax Refunds for Enterprise Projects); 351.102 (Pledge for Bonds). And the legislature used mandatory language in the legislation, such as an enterprise project is entitled to (1) a refund of state taxes .... and the owner of a qualified hotel project shall receive a rebate.... See GOV'T 2303.504(a)(1) (entitled to); TAX 151.429(h) (shall receive). The plain language of the statutes indicate that the legislature intended eligible municipalities to have the benefit of the state tax rebates for well over two years, and the use of mandatory language reflects the legislature's intent that the rebates were not subject to biennial appropriation. [8][9] For these reasons, we conclude that section 52a does apply here and that the legislature was not limited by article VIII, section 6 when it created an economic development program for qualified hotel projects and authorized the rebate of certain state taxes for a period of 10 years. See Harris Cnty. Flood Control Dist. v. Mann, 135 Tex. 239, 140 S.W.2d 1098, 1103 (Tex.1940); Brazos River Conservation & Reclamation Dist. v. McCraw, 126 Tex. 506, 91 S.W.2d 665, 67374 (Tex.1936); City of Aransas Pass v. Keeling, 112 Tex. 339, 247 S.W. 818, 81921 (Tex.1923); TEX. ATT'Y GEN. LA 132, at 3 (1977). Interpreting the statutes in this way, and in accordance with the plain language of the Texas Enterprise Zone Act and the other statutes applicable to this matter, supports the legislature's purpose in enacting the statutesto encourage economic development.FN5 Consequently, we conclude that the trial court did not err by concluding that the City's pledge of the state sales, use, and hotel occupancy taxes are not subject to biennial appropriation by the legislature. We resolve this subpart of issue one against the Attorney General. City's Portion of Mixed Beverage Taxes The Attorney General makes two arguments about the City's proposal to pledge the mixed beverage taxes. The first argument was raised as a subpart of his first issue concerning biennial appropriation and we address it now. We will address the second argument separately. [10] The legislature established a 14% state tax on mixed beverages and authorized the comptroller to

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Page 7 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) refund up to 10.7143% of that amount to the municipalities and counties from which the taxes were collected. See TAX 183.051(b). The Attorney General contends that the City's portion of the mixed beverage taxes is subject to biennial appropriation by the legislature because the statute expressly contains appropriation language: *5 (b) The comptroller shall issue to each ... incorporated municipality described in Subsection (a) a warrant drawn on [the general revenue] fund in an amount appropriated by the legislature that may not be greater than 10.7143 percent of receipts from permittees within the incorporated municipality during the quarter. Id. He contends that the language, in an amount appropriated by the legislature means that the mixed beverage tax refund is subject to the two-year appropriation requirement. Even if the language could be interpreted in this way, we nevertheless conclude that when a municipality chooses to pledge its portion of the mixed beverage taxes to secure payment of bonds for a qualified hotel project, the refund is not subject to the biennial appropriation requirement for the same reasons that we previously concluded the state sales, use, and hotel occupancy taxes were not subject to biennial appropriation. We resolve this subpart of issue one against the Attorney General. In summary, we conclude that the trial court did not err by concluding that the state sales, use, and hotel occupancy taxes, and the City's portion of the mixed beverage taxes are not subject to biennial appropriation. We turn now to the Attorney General's second argument concerning the mixed beverage taxes. STATE'S PORTION OF MIXED BEVERAGE TAXES In issue two, the Attorney General contends that the City's proposal to pledge the State's portion of the mixed beverage taxes is not authorized by statute. He argues that the trial court erred by concluding that the State is a governmental body within the meaning of Section 2303.5055(a) of the Texas Government Code and by impliedly concluding that section 2303.5055 authorizes the City to pledge the State's portion of the mixed beverage taxes. FN6

As we just explained, the State imposes a 14% tax on mixed beverages and refunds to a municipality up to 10.7143% of the amount of taxes collected from within that municipality. TAX 183.021, .051(b). The City proposes to pledge both its refunded portion and the State's portion of the mixed beverage taxes to secure payment of the bonds. It cites section 2303.5055 of the government code as its authority to pledge the State's portion of the mixed beverage tax revenue: (a) For a period that may not exceed 10 years, a governmental body, including a municipality, county, or political subdivision, may agree to rebate, refund, or pay eligible taxable proceeds to the owner of a qualified hotel project at which the eligible taxable proceeds were generated. ... (e) In this section, eligible taxable proceeds means taxable proceeds generated, paid, or collected by a qualified hotel project ... including hotel occupancy taxes, ad valorem taxes, sales and use taxes, and mixed beverage taxes. GOV'T 2303.5055(a), (e). The trial court agreed with the City and the final judgment validated the City's proposal to pledge the State's portion of the mixed beverage taxes. *6 [11] The Attorney General argues that governmental body as used in this statute does not include the State, but even if it did, [t]he State cannot assign local tax revenues, and local governmental entities cannot assign state tax revenues. We agree. Unlike other statutory provisions at issue in this case that state the City is entitled to or shall receive certain tax rebates, section 2303.5055 states that a governmental body may agree to refund the eligible taxable proceeds to the owner of a qualified hotel project. Id. 2303.5055(a). Even if we were to decide that governmental body includes the State, section 2303.5055 cannot be interpreted to permit one governmental body, such as a municipality, to make an agreement on behalf of another governmental body, such as the State. See id. But we do not need to decide whether governmental body includes the State for purposes of this statute. The Attorney General also argues that, even if governmental body includes the State, the City did

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Page 8 --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) (Cite as: 2011 WL 1902210 (Tex.App.-Dallas)) not offer any evidence that the State agreed to refund its portion of the mixed beverage taxes to the City. Again, we agree. The statute states that the agreement between the governmental body (in this case the State if we presume that governmental body includes the State) and the owner of a qualified hotel project (in this case the City) must be in writing. Id. 2303.5055(c). There is no evidence in the record that shows the State agreed to refund its portion of the mixed beverage taxes to the City. Consequently, the trial court erred by concluding that the City was entitled to pledge the State's portion of the mixed beverage taxes. We resolve issue two in the Attorney General's favor. CONCLUSION We reverse that portion of the judgment validating the State's portion of the mixed beverage taxes as a valid revenue source which the City may pledge to secure payment of the bonds. In all other respects, the trial court's judgment is affirmed. We remand this cause to the trial court for further proceedings consistent with this opinion. FN1. A group of taxpayers who opposed the issuance of the bonds and who intervened in the City's declaratory judgment action also filed a notice of appeal in this case. However, the trial court dismissed their intervention and we affirmed the dismissal in an earlier interlocutory appeal. See Putnam v. City of Irving, 331 S.W.3d 869, 872 (Tex.App.Dallas 2011, pet. filed). We do not consider the issues raised in their appellate brief because they are not properly before this Court. FN2. The City contends that the Attorney General did not preserve these issues for our review. However, the trial court held a hearing and rendered findings of fact and conclusions of law on these issues. We conclude that the issues were, at the very least, tried by consent. See TEX.R. CIV. P. 67. FN3. The Attorney General specifically challenges the trial court's conclusion of law number two that the City's receipt of the

State Project Taxes and the City's portion of the mixed beverage taxes is not subject to biennial appropriation by the legislature. FN4. The Texas Enterprise Zone Act states that its purposes are to establish a process that clearly identifies severely distressed areas of the state and provides incentives by state and local government to induce private investment in those areas by removing unnecessary governmental regulatory barriers to economic growth and to provide tax incentives and economic development program benefits. GOV'T 2303.002. FN5. The Court received two amicus briefs supporting the City's position on the issue of biennial appropriation. Each argued that the Attorney General's position on this issue is contrary to the position he took in their cases. FN6. This issue challenges the trial court's conclusion of law number one. Tex.App.-Dallas,2011. Ex parte City of Irving --- S.W.3d ----, 2011 WL 1902210 (Tex.App.-Dallas) END OF DOCUMENT

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App. B
Final Judgment

App. C
Excerpts from Texas Government Code, Chapter 1205

GOVERNMENT CODE CHAPTER 1205. PUBLIC SECURITY DECLARATORY JU...

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Sec. 1205.021. AUTHORITY TO BRING ACTION. An issuer may bring an action under this chapter to obtain a declaratory judgment as to: (1) the authority of the issuer to issue the public securities; (2) the legality and validity of each public security authorization relating to the public securities, including if appropriate: (A) authorized; (B) (C) lien; (D) the execution or proposed execution of a contract; (E) the imposition of a rate, fee, charge, or toll or the enforcement of a remedy relating to the imposition of that rate, fee, charge, or toll; and (F) the pledge or encumbrance of a tax, revenue, receipts, or property to secure the public securities; (3) the legality and validity of each expenditure or proposed expenditure of money relating to the public securities; and (4) the legality and validity of the public securities. Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999. the organization or boundaries of the issuer; the imposition of an assessment, a tax, or a tax the election at which the public securities were

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Sec. 1205.025. TIME FOR BRINGING ACTION; PENDENCY OF OTHER PROCEEDINGS. An issuer may bring an action under this chapter: (1) concurrently with or after the use of another procedure to obtain a declaratory judgment, approval, or validation; (2) before or after the public securities are authorized, issued, or delivered; (3) before or after the attorney general approves the public securities; and (4) regardless of whether another proceeding is pending in any court relating to a matter to be adjudicated in the suit. Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999.

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Sec. 1205.065. TRIAL OF ACTION. (a) The court shall with the least possible delay: (1) hear and determine each legal or factual question in the declaratory judgment action; and (b) (2) render a final judgment. Regardless of the pendency of an appeal from an order

entered under Subchapter E, on motion of the issuer, the trial judge shall proceed under Subsection (a). Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999.

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Sec. 1205.068. APPEALS. (a) Any party to an action under this chapter may appeal to the appropriate court of appeals: (1) an order entered by the trial court under Section 1205.103 or 1205.104; or (b) (2) the judgment rendered by the trial court. A party may take a direct appeal to the supreme court as

provided by Section 22.001(c). (c) An order or judgment from which an appeal is not taken is final. (d) An order or judgment of a court of appeals may be appealed to the supreme court. (e) An appeal under this section is governed by the rules of the supreme court for accelerated appeals in civil cases and takes priority over any other matter, other than writs of habeas corpus, pending in the appellate court. The appellate court shall render its final order or judgment with the least possible delay. Added by Acts 1999, 76th Leg., ch. 227, Sec. 1, eff. Sept. 1, 1999. Amended by Acts 1999, 76th Leg., ch. 1064, Sec. 6, eff. Sept. 1, 1999.

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App. D
Excerpts from Texas Government Code, Chapter 2303

GOVERNMENT CODE CHAPTER 2303. ENTERPRISE ZONES

Sec. 2303.502. REVIEW OF STATE AGENCY state agency rule adopted after September 1, applicable, encouragements and incentives to (1) the renovation, improvement,

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RULES; REPORT. (a) A 1987, may provide, when increase: or new construction of

housing in enterprise zones; and (2) the economic viability and profitability of business and commerce in enterprise zones. (b) Annually each state agency shall: (1) review the rules it administers that: (A) may adversely affect: (i) the renovation, improvement, or new construction of housing in enterprise zones; or (ii) the economic viability and profitability of business and commerce in enterprise zones; or (B) may otherwise affect the implementation of this chapter; and (c) (2) report the results of the review to the bank. The bank shall disseminate the reports to the governing

bodies of the entities that nominated the enterprise projects and others as necessary to advance the purposes of this chapter. (d) To contribute to the implementation of this chapter, an agency may waive, modify, provide exemptions to, or otherwise minimize the adverse effects of the rules it administers on the renovation, improvement, or new construction of housing in enterprise zones or on the economic viability and profitability of business and commerce in enterprise zones. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 2003, 78th Leg., ch. 814, Sec. 3.20, eff. Sept. 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1114, Sec. 15, eff. June 15, 2007.

Sec. 2303.503.

STATE PREFERENCES.

(a)

A state agency shall

give preference to the governing body of an enterprise zone or a qualified business or qualified employee located in an enterprise zone over other eligible applicants for grants or loans that are

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administered by the state agency if: (1) at least 50 percent of the grant or loan will be spent for the direct benefit of the enterprise zone; and (2) the purpose of the grant or loan is to: (A) (B) promote economic development in the community; or construct, improve, extend, repair, or maintain

public facilities in the community. (b) The comptroller may and is encouraged to deposit state money in financial institutions located or doing business in enterprise zones. (c) A state agency may and is encouraged to contract with businesses located in enterprise zones. (d) The office may give preference to enterprise zones in granting economic development money or other benefits. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 8.71, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 814, Sec. 3.21, eff. Sept. 1, 2003.

Sec. 2303.504.

STATE TAX REFUNDS AND CREDITS;

REPORT.

(a)

Subject to Section 2303.516, an enterprise project is entitled to: (1) a refund of state taxes under Section 151.429, Tax Code; and (2) a franchise tax credit under Subchapter Q-1, Chapter 171, Tax Code. (b) At the time of receipt of any tax benefit available as a result of participating in the enterprise zone program, including a state sales and use tax refund or franchise tax credit, three percent of the amount of the tax benefit shall be transferred to the Texas economic development bank fund under Subchapter B, Chapter 489, to defray the cost of administering this chapter. (c) Not later than the 60th day after the last day of each fiscal year, the comptroller shall report to the bank the statewide total of actual jobs created, actual jobs retained, and the tax refunds and credits made under this section during that fiscal year. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 2001, 77th Leg., ch. 1134, Sec. 1.02, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1134, Sec. 2.02, eff. Sept. 1, 2005;

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Acts 2003, 78th Leg., ch. 814, Sec. 3.23, eff. Sept. 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 1114, Sec. 16(a), eff. January 1, 2008.

Sec. 2303.505.

LOCAL SALES AND USE TAX REFUNDS.

(a)

To

encourage the development of areas designated as enterprise zones, the governing body of a municipality through a program may refund its local sales and use taxes paid by a qualified business on all taxable items purchased for use at the qualified business site related to the project or activity. (b) To promote the public health, safety, or welfare, the governing body of a municipality or county through a program may refund its local sales and use taxes paid by a qualified business or qualified employee. (c) The governing body of a municipality or county that is the governing body of an enterprise zone may provide for the partial or total refund of its local sales and use taxes paid by a person making a taxable purchase, lease, or rental for development or revitalization in the zone. (d) A person entitled to a refund of local sales and use taxes under this section shall pay the entire amount of state and local sales and use taxes at the time the taxes would be due if an agreement for the refund did not exist. (e) An agreement to refund local sales and use taxes under this section must: (1) be written; (2) contain an expiration date; and (3) require that the person entitled to the refund provide to the municipality or county making the refund the documentation necessary to support a refund claim. (f) The municipality or county shall make the refund directly to the person entitled to the refund in the manner provided by the agreement. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 985, Sec. 7, eff. Sept. 1, 1995. Amended by:

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Acts 2007, 80th Leg., R.S., Ch. 1114, Sec. 17, eff. June 15, 2007.

Sec. 2303.5055. REFUND, REBATE, OR PAYMENT OF TAX PROCEEDS TO QUALIFIED HOTEL PROJECT. (a) For a period that may not exceed 10 years, a governmental body, including a municipality, county, or political subdivision, may agree to rebate, refund, or pay eligible taxable proceeds to the owner of a qualified hotel project at which the eligible taxable proceeds were generated. (b) A municipality with a population of 1,500,000 or more may agree to guarantee from hotel occupancy taxes the bonds or other obligations of a municipally sponsored local government corporation created under the Texas Transportation Corporation Act (Article 1528l, Vernon's Texas Civil Statutes) that were issued or incurred to pay the cost of construction, remodeling, or rehabilitation of a qualified hotel project. (c) An agreement under this section must be in writing, contain an expiration date, and require the beneficiary to provide documentation necessary to support a claim. (d) A governmental body that makes an agreement under this section shall make the rebate, refund, or payment directly to the beneficiary. (e) In this section, "eligible taxable proceeds" means taxable proceeds generated, paid, or collected by a qualified hotel project or a business at a qualified hotel project, including hotel occupancy taxes, ad valorem taxes, sales and use taxes, and mixed beverage taxes. Added by Acts 1995, 74th Leg., ch. 76, Sec. 5.53(a), eff. Sept. 1, 1995.

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