Opinion

the County of La Salle v. Joe Weber, in His Official Capacity as Executive Director of the Texas Department of Transportation The Texas Department of Transportation Ted Houghton, in His Official Capacity as Chairman of the Texas Transportation Commission

Court: Texas Court of Appeals, 3rd District (Austin)
Filed: Feb 20, 2015
Status: Published
Cited by: 0 cases
Authority: More cited than 3.1%

striking down statute allowing court to determine the public good by preponderance of the evidence

How later courts described this case

striking down statute allowing court to determine the public good by preponderance of the evidence
performing ultra vires analysis based on future allocation of funds not triggered by statutory grant of decision-making authority
allowing de novo review when issue was one otherwise entrusted to courts
upholding agency interpretation so long as construction “is reasonable and does not contradict the plain language of the statute” (citation omitted)

Written by the judges who cited it.

The opinion

ACCEPTED

03-14-00501-CV

4238278

THIRD COURT OF APPEALS

AUSTIN, TEXAS

2/20/2015 4:53:19 PM

JEFFREY D. KYLE

CLERK

No. 03-14-00501-CV

In the Court of Appeals FILED IN

3rd COURT OF APPEALS

for the Third Judicial District AUSTIN, TEXAS

2/20/2015 4:53:19 PM

at Austin, Texas JEFFREY D. KYLE

Clerk

THE COUNTY OF LA SALLE,

Appellant,

JOE WEBER, IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE TEXAS

DEPARTMENT OF TRANSPORTATION; TED HOUGHTON, IN HIS OFFICIAL CAPACITY

AS CHAIRMAN OF THE TEXAS TRANSPORTATION COMMISSION;

AND THE TEXAS DEPARTMENT OF TRANSPORTATION,

Appellees.

On Appeal from the

353rd Judicial District Court of Travis County, Texas

APPELLEES’ BRIEF

KEN PAXTON SCOTT A. KELLER

Attorney General of Texas Solicitor General

CHARLES E. ROY KRISTOFER S. MONSON

First Assistant Attorney Assistant Solicitor General

General State Bar No. 24037129

OFFICE OF THE ATTORNEY GENERAL

P.O. Box 12548 (MC 059)

Austin, Texas 78711-2548

Tel.: (512) 936-1820

Fax: (512) 474-2697

kristofer.monson@texasattorneygeneral.gov

Oral Argument Conditionally

Requested COUNSEL FOR APPELLEES

TABLE OF CONTENTS

Table of Contents ................................................................................................... i

Index of Authorities ................................................................................................v

Statement Regarding Oral Argument ...................................................................xiii

Issues Presented .................................................................................................. xiv

Statement of Facts ................................................................................................. 2

Summary of Argument........................................................................................... 8

Standard of Review ............................................................................................... 10

Argument.............................................................................................................. 10

I. The County’s Ultra Vires is Jurisdictionally Barred By Operation

of Law ............................................................................................... 10

A. An Ultra Vires Suit Cannot Be Used to Attack Either Past

Administrative Action or the Application of an

Administrative Rule. ............................................................... 11

1. An ultra vires claim cannot undo past action,

because otherwise it would serve as a form of

judicial review. .............................................................. 12

2. An ultra vires claim cannot be used to interfere with

a statutory grant of discretion, such as an

authorization to set policy through administrative

rulemaking. ................................................................... 13

B. There is No Jurisdiction in this Case Because the Petition

Complains About a Matter Confided to Executive-

Department Discretion by SB 1747. ........................................ 14

1. The County’s ultra vires allegations focus on an

alleged failure to exclude certain counties from the

allocation based on the purported omission of a

factfinding proceeding from the application

process. ......................................................................... 14

2. SB 1747 gives the Department discretion to set the

requirements for applications and suggests that

counties determine whether they are “affected by”

oil-and-gas production in the first instance. ................... 15

3. SB 1747 does not require the Department to

determine whether counties are in fact “affected

by” oil-and-gas production; it requires the counties

to make that determination. .......................................... 17

4. The non-discretionary provisions of SB 1747

encompass an award of funds to a county that has no

oil-and-gas production at all. ......................................... 18

C. The County’s Statutory-Construction Argument Is

Wrong. .................................................................................... 19

1. The County’s approach reads the words “affected

by” out of SB 1747. ....................................................... 19

2. Nothing in SB 1747’s pre- and post-enactment

legislative history changes the statutory analysis. .......... 21

a. The pre-enactment versions of SB 1747

cannot change its plain language. ....................... 22

b. The post-enactment statements of legislators

at most reflect their preference for statutory

language the House passed, but that did not

survive conference. ............................................ 24

3. The County’s invocation of administrative

deference makes no sense, given that the County

seeks to avoid the procedural mechanisms in which

that deference applies. .................................................. 25

D. The County Has a Judicial Remedy to Match its Legal

Theory: a § 2001.038 Suit that Would, if Successful,

Impact Future Allocations. ..................................................... 27

II. The County’s View of the Ultra Vires Cause of Action Ignores

the Common Law and Would Create an Unconstitutional

System for Reviewing Administrative Action. ...................................28

A. The County’s Lawsuit Is, In Effect, An Improper Attempt

to Seek Common-Law Judicial Review of Administrative

Action. ....................................................................................29

B. The County’s Argument Improperly Takes the Form of

the Relief it Seeks as the Basis for Establishing Jurisdiction

Over the Substance of its Claim. ............................................. 31

C. The County’s Reliance on Extrinsic Evidence Would

Lead to a Constitutionally Defective System of

Administrative Rule. ............................................................... 32

1. The County seeks to invalidate the allocation based

on extrinsic evidence..................................................... 33

2. Even a statutory judicial-review mechanism based

on this type of evidentiary inquiry would violate the

Texas Constitution. ...................................................... 33

D. While the County Would Be Entitled to Raise its Legal

Arguments in a Properly-Pleaded § 2001.038 Claim,

There is No Proper § 2001.038 Claim in this Appeal. ............. 35

1. Section 2001.038 is a waiver of sovereign immunity

and must be so construed. ............................................. 35

2. The County’s petition does not identify a “rule” ......... 37

iii

3. The County’s petition does not articulate a “right

or privilege” necessary to establish standing or a

waiver of immunity. ...................................................... 38

4. Even if the County’s jurisdictional views were

correct, its claim necessarily fails. ................................. 39

III. The Court Should Not Issue an Appellate Injunction. ......................40

Prayer ................................................................................................................... 43

Certificate of Service............................................................................................ 44

Certificate of Compliance .................................................................................... 44

INDEX OF AUTHORITIES

Cases

Bacon v. Tex. Historical Comm’n,

411 S.W.3d 161 (Tex. App.—Austin 2013, no pet.) ......................... xiii, 11, 16

Baird v. Sam Houston Elec. Coop,

627 S.W.2d 732 (Tex. App.—Houston [1st Dist.] 1981)

(orig. proceeding) (per curiam) .................................................................. 42

Butler Weldments Corp. v. Liberty Mut. Ins. Co.,

3 S.W.3d 654 (Tex. App.—Austin 1999, no pet.) ........................................ 27

Chem. Bank & Trust Co. v. Falkner,

369 S.W.2d 427 (Tex. 1963) ........................................................................ 34

City of Amarillo v. Hancock,

150 Tex. 231, 239 S.W.2d 788 (1951) ...........................................................30

City of El Paso v. Heinrich,

284 S.W.3d 366 (Tex. 2009) ................................................................. 12, 32

City of Houston v. Little Nell Apartments, L.P.,

424 S.W.3d 640 (Tex. App.—Houston [14th Dist.] 2014,

pet. filed) .................................................................................................... 13

City Pub. Serv. Bd. of San Antonio v. Pub. Util. Comm’n,

96 S.W.3d 355 (Tex. App.—Austin 2002, no pet.)................................. 36-37

Combs v. City of Webster,

311 S.W.3d 85 (Tex. App.—Austin 2009, pet. denied)..................... 12, 34, 37

Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envtl. Quality,

307 S.W.3d 505 (Tex. App.—Austin 2010, no pet.) ........................ xiii, 11, 12

Davis v. City of Lubbock,

160 Tex. 38, 326 S.W.2d 699 (1959) ...................................................... 33, 34

Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., Inc.,

236 S.W.3d 190 (Tex. 2007)........................................................................ 21

Entergy Gulf States, Inc. v. Summers,

282 S.W.3d 433 (Tex. 2009) ....................................................................... 21

Fire Dep’t of City of Fort Worth v. City of Fort Worth,

147 Tex. 505, 217 S.W.2d 664 (1949) ...............................................30, 33, 34

Fleming Foods v. Rylander,

6 S.W.3d 278 (Tex. 1999) ............................................................................ 21

Friends of Canyon Lake, Inc. v. Guadalupe-Blanco River Auth.,

96 S.W.3d 519 (Tex. App.—Austin 2002, pet. denied) ......................... 34, 39

Gattis v. Duty,

349 S.W.3d 193 (Tex. App.—Austin 2011, no pet.) ..................................... 10

Gen. Servs. Comm’n v. Little-Tex Insulation Co.,

39 S.W.3d 591 (Tex. 2001) ............................................................... 11, 29, 30

Gerst v. Nixon,

411 S.W.2d 350 (Tex. 1967) ........................................................................ 34

Gulf Land Co. v. Atl. Ref. Co.,

134 Tex. 59, 131 S.W.2d 73 (1939) ...............................................................29

Houston Mun. Emps. Pension Sys. v. Ferrell,

248 S.W.3d 151 (Tex. 2007) ........................................................................30

In re State Board for Educator Certification,

No. 13-0537, 2014 WL 7204548 (Tex. Dec. 19, 2014)

(orig. proceeding) ...................................................................................... 42

Kerrville State Hosp. v. Clark,

923 S.W.2d 582 (Tex. 1996) ........................................................................ 36

Key W. Life Ins. Co. v. State Bd. of Ins.,

163 Tex. 11, 350 S.W.2d 839 (1961) ........................................................ 33-34

Livingston v. Beeman,

408 S.W.3d 566 (Tex. App.—Austin 2013, pet. granted) ............................ 32

Lopez v. Harding,

68 S.W.3d 78 (Tex. App.—Dallas 2001, no pet.) ........................................ 11

Madison v. Martinez,

42 S.W.2d 84 (Tex. Civ. App.—Dallas 1931, writ ref’d) ............................ 42

McLane Co. v. Strayhorn,

148 S.W.3d 644 (Tex. App.—Austin 2004, pet. denied) ............................. 11

Merritt v. Cannon,

No. 03-10-00125-CV, 2010 WL 3377778 (Tex. App.—Austin 2010,

pet. denied) (mem. op.)............................................................................... 13

Milton v. Herman,

947 S.W.2d 737 (Tex. App.—Austin 1997) (orig. proceeding) .................... 11

Mote Res. Inc. v. RR Comm’n,

618 S.W.2d 877 (Tex. Civ. App.—Austin 1981, no writ) ............................. 41

Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs.,

545 U.S. 967 (2005) (Scalia, J., dissenting)..................................................26

Ojo v. Farmers Grp., Inc.,

356 S.W.3d 421 (Tex. 2011) ........................................................................ 21

Richardson v. First Nat’l Life Ins. Co.,

419 S.W.2d 836 (Tex. 1967) ........................................................................ 10

Rodriguez v. Serv. Lloyds Ins. Co.,

997 S.W.2d 248 (Tex. 1999)........................................................................ 13

RR Comm’n v. Tex. Citizens for a Safe Future and Clean Water,

336 S.W.3d 619 (Tex. 2011).........................................................................26

S. Canal Co. v. State Bd. of Water Eng’rs,

159 Tex. 227, 318 S.W.2d 619 (1958) ........................................................... 34

vii

S.C. San Antonio, Inc. v. Tex. Dep’t of Human Servs., 891 S.W.2d 773

(Tex. App.—Austin 1995, writ denied) ....................................................... 27

Slay v. Tex. Comm’n on Envtl. Quality,

351 S.W.3d 532...................................................................................... 27, 35

State v. BP Amer. Prod. Co.,

290 S.W.3d 345 (Tex. App.—Austin 2009, pet. denied) ............................. 38

State v. Shumake,

199 S.W.3d 279 (Tex. 2006)........................................................................ 21

Tex. A&M Univ. Sys. v. Koseoglu,

233 S.W.3d 835 (Tex. 2007) ........................................................................ 10

Tex. Ass’n of Bus. v. Tex. Air Control Bd.,

852 S.W.2d 440 (Tex. 1993) ....................................................................... 10

Tex. Comptroller of Pub. Accounts v. Walker Electric Co., LLC,

No. 03-13-00285-CV, 2014 WL 6612431 (Tex. App.—Austin Nov.

21, 2014, reh’g filed) (mem. op.) .................................................................29

Tex. Dep’t of Parks & Wildlife v. Miranda,

133 S.W.3d 217 (Tex. 2004) ........................................................................ 10

Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc.,

145 S.W.3d 170 (Tex. 2004) ........................................................................30

Tex. Dep’t of Pub. Safety v. Salazar,

304 S.W.3d 896 (Tex. App.—Austin 2009, no pet.) ................................... 38

Tex. Dep’t of State Health Servs. v. Balquinta,

429 S.W.3d 726 (Tex. App.—Austin 2014, pet. filed) ................................. 38

Tex. Health & Human Servs. Comm’n v. El Paso Cnty. Hosp. Dist.,

351 S.W.3d 460 (Tex. App.—Austin 2011), aff’d 400 S.W.3d 72

(Tex. 2013) ........................................................................................... 33, 36

Tex. Health Facilities Comm’n v. Charter Med.-Dallas., Inc.,

665 S.W.2d 446 (Tex. 1984)...................................................................31, 33

viii

Tex. Logos, L.P. v. Tex. Dep’t of Transp.,

241 S.W.3d 105 (Tex. App.—Austin 2007, no pet.) .................................... 35

Trudy’s Tex. Star, Inc. v. City of Austin,

207 S.W.3d 894 (Tex. App.—Austin 2010, no pet.).................................... 18

Wichita Falls State Hosp. v. Taylor,

106 S.W.3d 692 (Tex. 2003) ....................................................................... 36

Constitutional Provisions, Statutes and Rules

TEX. CONST. art. II, § 1 ....................................................................................29-30

TEX. CONST. art. V § 6(a) .................................................................................... 42

43 TEX. ADMIN CODE

§ 15.182........................................................................................................ 4

§ 15.184(a) ................................................................................................... 4

§ 15.185 ........................................................................................................ 4

§ 15.186(a) .................................................................................................. 41

§ 15.187(b)(3) ............................................................................................... 4

§ 15.189(a) ....................................................................................................5

§ 15.189(b) ....................................................................................................5

§ 15.191(a) .....................................................................................................5

§ 15.194 ....................................................................................................... 41

§ 15.195 .........................................................................................................5

TEX. GOV’T CODE § 311.034 ................................................................................. 36

TEX. GOV’T CODE § 2001.038 ....................................................................... passim

TEX. GOV’T CODE § 2001.038(a) .....................................................................31, 37

TEX. GOV’T CODE § 2001.171 ............................................................................... 14

TEX. GOV’T CODE § 2001.174 ............................................................................... 14

TEX. R. APP. P. 24.2(a)(3) .................................................................................... 42

TEX. SENATE RULE 7.12(b)(10) ............................................................................ 22

TEX. TRANSP. CODE (SB 1747)

§ 222.1071 .....................................................................................................3

§ 222.1071(b) .................................................................................... xiv, 3, 17

§ 222.1071(c) ................................................................................................3

§ 222.1071(c)(l) ............................................................................................3

§ 251.103(a) ..................................................................................................7

§ 256.101(2) ............................................................................................2, 20

§ 256.102 .......................................................................................................

§ 256.103..................................................................................................... 15

§ 256.103(a) ............................................................xiv, 2, 4, 17, 18, 19, 22, 39

§ 256.103(b) ............................................................................................ 3, 18

§ 256.103(b)(1)........................................................................................8, 20

§ 256.103(b)(2) .............................................................................................3

§ 256.103(b)(24) ........................................................................................ 20

§ 256.104(a)(1)............................................................................................. 2

§ 256.104(a)(2)(A) ........................................................................................3

§ 256.104(a)(2)(B)(iii) ..................................................................................3

§ 256.104(a)(2)(B)(iv) ..................................................................................3

§ 256.104(b) ................................................................................................ 15

§ 256.104(c) ................................................................................................ 15

§ 256.105.......................................................................................................3

Other Authorities

Act of May 26, 2013, 83d Leg., R.S., c. 836 § 40, 2013 Tex. Gen. Laws 2163 ..........5

Am. Heritage Dictionary (4th ed. 1994) 29 ............................................................ 19

Aman Batheja, Lawsuit Over Road Funding Program Leaves Funds in

Limbo, Texas Tribune (May 15, 2014) ....................................................... 24

Garner, A Dictionary of Modern Legal Usage (2d ed. 1995) 34 ........................ 19-20

George D. Braden, et. al, The Constitution of the State of Texas;

An Annotated and Comparative Analysis, vol. 1 (1977) ............................... 34

Hearing, Select Committee on Transportation Funding, Expenditures &

Finance, 83d Leg., R.S. (May 6, 2014) (5:46:18).......................................... 25

House Alternative Bill, Tex SB 1747, 83rd Leg., R.S. (2013) (May 22,

2013) ........................................................................................................... 25

Minute Order 113819, Tex. Transp. Comm’n Minutes at 7-8 (June 30,

2014) available at ftp.dot.state.tx.us/pub/txdot-

info/adm/2014/0130/minutes.pdf ............................................................... 6

Minute Order 113819, Tex. Transp. Comm’n Minutes at 7-8 (June 30,

2014) available at ftp.dot.state.tx.us/pub/txdot-

info/energy/sb1747/notification-013014.pdf ................................................ 6

Senate Bill, 1747. Act of May 26, 2013, 83d Leg., R.S., ch. 1372, 2013 Tex.

Gen. Laws 3640 ........................................................................................... 2

Senate Research Center, Bill Analysis, SB 1747, 83d Leg. R.S. (2013)

(enrolled version)........................................................................................ 23

Senate Research Center, Bill Analysis, SB 1747, 83d Leg. R.S. (2013)

(filed version).........................................................................................22-23

Testimony of La Salle County Judge, Hearings on Tex. S.B. 1747 Before

the House Comm. On Energy Res., 83d Leg., R.S....................................... 23

Testimony of Senator Uresti, Hearings on Tex. SB 1747 Before the

Senate Comm. on Transp., 83d Leg., R.S. at 01:35:44 (Apr.10,

2013) ........................................................................................................... 23

Tex. Transp. Commission Minutes at 3701-71 (Nov. 2013), available at

http://ftp.dot.state.tx.us/pub/txdot-

info/adm/2013/documents/minutes/112113.pdf ..........................................5

TxDOT Notification: Notice of request for Applications for County

Transportation Infrastructure Fund Grant Program,

ftp.dot.state.tx.us/pub/txdot-info/energy/sb1747/notification-

112613.pdf .................................................................................................... 6

TxDOT, Estimated Allocation Chart, ftp.dot.state.tx.us/pub/txdot-

info/energy/sb1747/estimated-vs-actual.pdf................................................ 6

TxDOT, Revised Notification, Revised Notice of Request for Application

for County Transportation Infrastructure Grant Fund,

ftp.dot.state.tx.us/pub/txdot-info/energy/sb1747/estimated-vs-

actual.pdf ..................................................................................................... 6

Senate Research Website, www.senate.state.tx.us/SRC/BA.htm ........................ 22

xii

STATEMENT REGARDING ORAL ARGUMENT

Oral argument is not warranted. The case law governing dismissal of putative

ultra vires claims that attempt to challenge the result of executive-department action

that would be subject to APA judicial review—if it were subject to judicial review at

all—is well established. E.g., Bacon v. Tex. Historical Comm’n, 411 S.W.3d 161, 180

(Tex. App.—Austin 2013, no pet.); Creedmoor-Maha Water Supply Corp. v. Tex.

Comm’n on Envtl. Quality, 307 S.W.3d 505, 517-18 (Tex. App.—Austin 2010, no

pet.). However, in the event the Court grants argument, the Department requests

permission to present.

xiii

ISSUES PRESENTED

The Texas Department of Transportation distributes funds to counties that

are “affected by increased oil and gas production.” E.g., TEX. TRANSP. CODE

§ 256.103(a). The Department has express authority to regulate the application

process and set standards for applications. It has no authority, by contrast, to make

an independent determination that a county is so affected; instead, the relevant

statutes state that it is the counties that determine whether each county is “affected

because of oil and gas exploration and production activities” and “would benefit

from funding [under the program.]” Id. § 222.1071(b). The County of La Salle

asserts that the defendant officials have acted ultra vires by allocating money to all

the counties that made valid applications.

1. The common law bars suits for judicial review based on statutory

language, and the Legislature has provided for neither a formal

administrative proceeding nor judicial review of the Department’s

allocation of funding. Can the County circumvent the common-law

prohibition on suits for judicial review by framing its lawsuit as a challenge

to the results of the allocation?

2. Is the County’s ultra vires claim barred because the Department has

acted intra vires?

3. Has the County satisfied the pleading requirements to bring suit under

§ 2001.038 of the Government Code?

4. Should an appellate writ of injunction issue to suspend a statewide road

funding program?

xiv

No. 03-14-00501-CV

In the Court of Appeals

for the Third Judicial District

at Austin, Texas

THE COUNTY OF LA SALLE,

Appellant,

JOE WEBER, IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE TEXAS

DEPARTMENT OF TRANSPORTATION; TED HOUGHTON, IN HIS OFFICIAL CAPACITY

AS CHAIRMAN OF THE TEXAS TRANSPORTATION COMMISSION; ET AL.,

Appellees.

On Appeal from the

353rd Judicial District Court of Travis County, Texas

APPELLEES’ BRIEF

TO THE HONORABLE THIRD COURT OF APPEALS:

Ignoring the discretion granting language in the statute, the County frames an

ultra vires claim on the results of the allocation. SB 1747 gives the Department full

discretion over the application requirements and process, and the County does not

suggest that the Department did not properly allocate funds between the counties

that filed applications. In effect, the County’s legal theory would comprise common-

law judicial review in the absence of statutory authority. The County’s erroneous

approach would create an end run around the common law, vitiate the APA’s

procedural requirements by creating a common-law alternative, and raise serious

separation-of-powers concerns. The Court should affirm the trial court’s dismissal

of the lawsuit.

STATEMENT OF FACTS

1. SB 1747 and the Transportation Infrastructure Fund Grant Program

This lawsuit stems from the Department’s application of the administrative

rules implementing the Transportation Infrastructure Fund, created in 2013 by

Senate Bill 1747. Act of May 26, 2013, 83d Leg., R.S., ch. 1372, 2013 Tex. Gen. Laws

3640. This brief will cite to the codified provisions in the current Transportation

Code.

Senate Bill 1747 sets up a fund—to be funded from multiple sources outside

of state general revenue—dedicated to “grants . . . for transportation infrastructure

projects located in areas of the state affected by increased oil and gas production.”

TEX. TRANSP. CODE § 256.103(a); see also id. § 256.102 (listing sources of funding).

Eligible projects include the planning, construction, and maintenance of

transportation infrastructure “intended to alleviate degradation caused by the

exploration, development, or production of oil or gas.” Id. § 256.101(2).

County Eligibility

A county seeking funding must file the previous year’s road condition report,

see id. § 256.104(a)(1), as well as a document establishing a County Energy

Transportation Reinvestment Zone, id. § 256.104(a)(2)(A), and a plan setting out

the projects to be funded, along with the commitment of matching funds, see id.

§ 256.104(a)(2)(B)(iii) (referring to TEX. TRANSP. CODE § 256.105). The plan may

also be subject to “any other requirements imposed by the department.” Id.

§ 256.104(a)(2)(B)(iv).

The requirement of a County Energy Transportation Reinvestment Zone

invokes a separate Transportation Code section, § 222.1071. See TEX. TRANSP.

CODE § 222.1071. To establish a zone, a county commissioner’s court must

determine that an area is affected because of oil-and-gas exploration and production

activities and would benefit from funding under Chapter 256. Id. § 222.1071(b) (“A

county, after determining that an area is affected because of oil and gas exploration

and production activities and would benefit from funding . . .”). The county must

dedicate the captured appraised value of real property located in the zone to future

transportation infrastructure projects.1 Id. § 222.1071(c). There is no requirement in

SB 1747 that any other body determine whether the county is affected.

Statutory Allocation Requirements

The statute sets a specific allocation formula. See id. § 256.103(b) (allotting 20

percent of the amount to weight-tolerance permits, 20 percent according to oil-and-

1“Captured appraised value of real property,” see TEX. TRANSP. CODE § 222.1071(c)(l), is related

to future increases in tax funds in the affected zones, see id. § 256.103(b)(2).

gas-production taxes, 50 percent according to well completions, and 10 percent

according to oil-and-gas injection rates). The first of these categories, weight-

tolerance permits, is tied to increased road usage but is not directly tied to oil-and-

gas production.

Administrative Rules

The Department has statutory authority to adopt implementing rules for the

program, as well as to impose additional requirements on the “plan” required in the

application. TEX. TRANSP. CODE § 256.103(a).

In large part, the rules track the statute. The rules specify that grant funds will

be available “to each eligible county that submits a valid application.” 43 TEX.

ADMIN. CODE § 15.184(a). To be eligible, a county must “be entirely or partially in

an area affected by increased oil and gas production,” create a tax-recapture zone,

and create and advisory board to administer the zone. Id. § 15.182. The rules flesh

out the calculations for determining the weighted distribution of funds. Id. § 15.185.

The rules make the award of funding mandatory to each eligible county that submits

a valid application. Id. § 15.184(a).

The application process is set for a particular time period and requires that the

Department give notice of the estimated total amount of money available for grants

and the estimated allocation “for each county in the state . . . using the assumption

that all counties will be eligible and apply.” Id. § 15.187(b)(3). The Department is to

perform two reviews of the applications: a preliminary review in the first 14 days after

the application is received, which allows the applicant county 14 days to fix any

deficiencies in the application, see id. § 15.189(a), followed by a “Department

review” of “each valid application,” id. § 15.189(b). Consistent with the statute,

there is no provision for judicial review of the allocation or the application process.

Once the allocation is made, each county must enter into an agreement with

the Department, placing restrictions on the granted funds. See id. § 15.191(a)

(requiring, in essence, that any projects will be part of the county road system, limit

the grant to allowable costs, and maintain the road in the future, and that the

Department be reimbursed for its expenses in any project).

The rules set out debarment standards for counties, if they fail to comply with

the rules or if they fail to commence a project within three-years after the date of the

agreement under § 15.191(a). Id. § 15.195.

2. The Dispute

The dispute arises from the allocation of $225 million dollars appropriated in

2013 to be distributed to the applicant counties.2 On November 21, 2013, the grant

application deadline was set for February 7-14, 2014.3 See CR.169-170. The

2 See Act of May 26, 2013, 83d Leg., R.S., c. 836 § 40, 2013 Tex. Gen. Laws 2163, 2171.

3 See Tex. Transp. Commission Minutes at 3701-71 (Nov. 2013), available at

http://ftp.dot.state.tx.us/pub/txdot-info/adm/2013/documents/minutes/112113.pdf.

Department sent each county judge a notice that they could apply for funding and

included an estimated allocation for each county in the state.4 The original estimated

allocation for La Salle County was $5,961,191.00.5 See CR.222. The application

deadline was then delayed a month, and a similar revised notice was sent out to the

county judges.6 See CR.170-71.

During the revised period, La Salle County applied for $158,507,765.00,

nearly 70% of the total amount allocated to the fund.7 It was awarded $6,456,703.00.

PX38 p.2.

The County brought suit against the Department, its Executive Director, and

the Chairman and Commissioners of the Texas Transportation Commission.8 E.g.,

CR.162 (collectively “the Department”). It sought declaratory and injunctive relief

4 TxDOT Notification: Notice of request for Applications for County Transportation

Infrastructure Fund Grant Program, ftp.dot.state.tx.us/pub/txdot-

info/energy/sb1747/notification-112613.pdf (indicating that the estimate “assumes all 254

counties will be eligible and apply”).

5 TxDOT, Estimated Allocation Chart, ftp.dot.state.tx.us/pub/txdot-

info/energy/sb1747/estimated-vs-actual.pdf.

6 Minute Order 113819, Tex. Transp. Comm’n Minutes at 7-8 (June 30, 2014) available at

ftp.dot.state.tx.us/pub/txdot-info/adm/2014/0130/minutes.pdf; see also

ftp.dot.state.tx.us/pub/txdot-info/energy/sb1747/notification-013014.pdf.

7 TxDOT, Revised Notification, Revised Notice of Request for Application for County

Transportation Infrastructure Grant Fund, ftp.dot.state.tx.us/pub/txdot-

info/energy/sb1747/estimated-vs-actual.pdf.

8The Transportation Commission is the body that adopts rules for the Department of

Transportation.

based on the “Legislature’s very specific mandate for determining county

eligibility” for the funding. Id. It characterized the language in § 251.103(a) as

imposing a bar on the Department’s discretion to allocate funding. It described the

supposed violation of law to be enjoined as the failure to make an “effort to ensure

such eligibility.” E.g., CR.166 n.5. The County complained that by including all

Texas counties in the initial allocation estimate, there was “no indication that [the

Department] has applied this rule or the underlying statute” to “actually determine

county eligibility,” CR.170 ¶ 28; see also CR.171 ¶ 30 (the Department has “made

statements to the effect that it has no authority . . . to determine whether a county’s

road condition report is sufficient”); CR.171-72 ¶ 33 (“TxDOT pressed forward

without filtering out applications”).

The County sought to enjoin the Department from dispersing the grants

without first completing a new application process. CR.175-76 ¶ 44. It sought

declaratory relief that the “actions of the Official Defendants” are “non-compliant

with the properly construed statutes and valid rules, if any, governing the TIF grant

program.”CR.176 ¶ 46. The County cited § 2001.038 of the Government Code,

asking the court, in the alternative, to declare “any TxDOT rules invalid to the

extent that they depart from the statute.” CR. 177 ¶ 47. And it sought fees under the

Uniform Declaratory Judgments Act. CR.177 ¶ 48.

The Department filed a plea to the jurisdiction, arguing that (1) the

Department is neither required nor authorized to perform a factfinding process with

regard to the applications, (2) the ultra vires claim was inappropriate, and (3) the

petition failed to invoke jurisdiction over the § 2001.038 claim because it did not

specify a rule that it challenged. See CR.134-37; CR.217-37

The trial court granted the Department’s plea to the jurisdiction. CR.335.

SUMMARY OF ARGUMENT

The County’s main statutory-construction argument is simply wrong. The

plain text of SB 1747 does not require a county to show that it has oil and gas

production within its territory; rather, it requires merely that the county be

“affected” by increased oil and gas production. Even a county that is not

experiencing increased oil and gas production can receive funding based on the

number of heavy-load permits it issues. TEX. TRANSP. CODE § 256.103(b)(1). That

approach makes sense, because a county may be traversed by heavy equipment for

oil and gas production even if there is no oil-and-gas activity within its boundaries.

Such a county is “affected by” oil and gas production.

The Court need not directly address that question, though, because the

Department has been given discretion under SB 1747 to administer the grant funds

and determine whether to treat the applications tendered by the counties as

complete. The Department’s acts have all, therefore, been intra vires. The entirety

of SB 1747 underscores the grant of discretion over the application process, because

it places the decision of how to handle the applications in the Department’s hands

and authorizes the adoption of administrative rules to effectuate that process. SB

1747 does not require the Department to investigate the truth of each application, or

to engage in a fact-finding process. Indeed, the Legislature provided neither time nor

resources to perform that task. SB 1747’s only mention of a decision whether a

county is affected by oil and gas production makes that determination one for the

county to make. And even the portion of SB 1747 that is non-discretionary, the

allocation formula (which the County does not argue that the Department violated),

contemplates the award of funds to counties that have no oil-and-gas activity,

because it allows awards based on the number of heavy use permits issued. In sum,

because the Department is not required to establish the truth of applications and the

County does not assert that the Department failed to apply the mandatory allocation

provisions of SB 1747, there is not even an arguable basis for an ultra vires claim.

The bar on ultra vires claims does not leave the County without a forum in

which to raise its arguments about the implementation of SB 1747. There could be

jurisdiction over a suit to challenge the rule under § 2001.038 of the APA, or a claim

within the scope of the inherent-review power, two causes of action on which the

County does not attempt to base jurisdiction. But that new lawsuit could affect only

future allocations; to reach back in time and undo the Department’s acceptance of

the applications would be an act of judicial review in the absence of statutory

authorization. And the Texas Supreme Court has repeatedly made clear that there is

no such thing as common-law judicial review of past executive-department action.

Accordingly, the trial court correctly dismissed the lawsuit.

STANDARD OF REVIEW

A plaintiff must demonstrate that the allegations in his petition fall within the

court’s jurisdiction. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446

(Tex. 1993) (citing Richardson v. First Nat’l Life Ins. Co., 419 S.W.2d 836, 839 (Tex.

1967)). A defendant’s plea to the jurisdiction based on sovereign immunity is

analyzed in two steps: (1) examining the plaintiff’s petition to see if it articulates a

claim within the scope of a valid waiver of immunity and (2) determining whether

undisputed evidence of jurisdictional facts negates the trial court’s jurisdiction. Tex.

Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). The legal

question whether the alleged facts invoke an exception to immunity can require an

inquiry into the merits of the claim; conclusory legal allegations are insufficient,

without supporting facts, to establish jurisdiction. E.g., Gattis v. Duty, 349 S.W.3d

193, 201 (Tex. App.—Austin 2011, no pet.) If either the pleadings themselves or the

evidence affirmatively negates jurisdiction over the claim, the claim must be

dismissed. Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 847 (Tex. 2007).

ARGUMENT

I. THE COUNTY’S ULTRA VIRES IS JURISDICTIONALLY BARRED BY

OPERATION OF LAW.

The County asks the wrong question in its ultra vires claim: it asks the Court

to stop future disbursement of funds. But its substantive arguments are all tied to

alleged defects in the vetting and acceptance of applications, all of which occurred in

the past and discretion over which is placed squarely with the Department. This

lawsuit is an attempt to bypass the bar on common-law judicial review to undo an

action—the acceptance of formally valid applications at face value—that was fully

within the grant of discretionary authority made by SB 1747.

A. An Ultra Vires Suit Cannot Be Used to Attack Either Past

Administrative Action or the Application of an Administrative

Rule.

As the Court has repeatedly held, an ultra vires claim is barred if it involves an

issue committed to an agency’s discretion. E.g., Creedmoor-Maha Water Supply Corp.

v. Tex. Comm’n on Envt’l Qual., 307 S.W.3d 505, 517-18 (Tex. App.—Austin 2010,

no pet.) (when statute places decision in defendant’s hands without providing for

judicial review, no ultra vires claim allowed); Bacon v. Tex. Historical Comm’n, 411

S.W.3d 161, 180 (Tex. App.—Austin 2013, no pet.) (same); see also McLane Co. v.

Strayhorn, 148 S.W.3d 644, 650 (Tex. App.—Austin 2004, pet. denied) (dismissing

claim because statute “clearly gave the Comptroller the authority and responsibility

to manage and administer [a lump sum fund], including the authority to decide what

collateral to accept”).9 This approach makes sense for two reasons: (1) the ultra vires

9 A careful line should be drawn between the ultra vires cause of action, which is a common-law

proceeding that allows courts to enjoin ultra vires activity, and the inherent right of judicial review

of past acts on constitutional grounds. See Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39

S.W.3d 591, 599 (Tex. 2001) (setting out categories of inherent judicial review). For clarity, this

brief will refer to the ultra vires claim as deriving from common law, and judicial review as being

inherent under the Constitution. See, e.g., Lopez v. Harding, 68 S.W.3d 78, 81 (Tex. App.—Dallas

2001, no pet.) (correctly distinguishing between common-law and inherent powers); Milton v.

Herman, 947 S.W.2d 737, 739 (Tex. App.—Austin 1997) (orig. proceeding) (pointing out that

cause of action cannot be used to undo a past decision conferred on an executive-

department entity because there is a bar on common-law review of administrative

decisions; (2) there cannot be an ultra vires claim if a defendant entity has complied

with its own administrative rules, because those rules are themselves a source of legal

authority.

1. An ultra vires claim cannot undo past action, because

otherwise it would serve as a form of judicial review.

An ultra vires claim must not address past action. City of El Paso v. Heinrich,

284 S.W.3d 366, 375-78 (Tex. 2009). Otherwise, it would violate the prohibition on

common-law judicial review and extend the scope of the courts’ narrow inherent

power of judicial review. E.g., Combs v. City of Webster, 311 S.W.3d 85, 99 (Tex.

App.—Austin 2009, pet. denied) (dismissing ultra vires claim that sought to undo

tax determination and reallocate tax funds already collected and distributed). Thus,

it is appropriate to bring suit to affect future, discrete payments based on a statutory

scheme that does not require a particular administrative determination. E.g., id. at

100-101 (performing ultra vires analysis based on future allocation of funds not

triggered by statutory grant of decision-making authority); Heinrich, 284 S.W.3d

366, 377-78 (remanding, because case resolved on factual dispute regarding

underlying legal obligation, but parties did not dispute meaning of statute). But it is

statutory courts lack inherent constitutional authority); cf. Creedmoor-Maha, 307 S.W.3d at 518

(describing common-law ultra vires claim as “inherent”).

not appropriate to perform the ultra vires inquiry when assessing the results of a

specific administrative determination intended to be performed by an executive-

department entity. E.g., Merritt v. Cannon, No. 03-10-00125-CV, 2010 WL 3377778,

at *3-*4 (Tex. App.—Austin 2010, pet. denied) (mem. op.) (correctly concluding

that ultra vires claim for failure to enforce statute was jurisdictionally barred because

there was no basis for judicial review of predicate finding made by Department under

specific statutory authorization); see also City of Houston v. Little Nell Apartments,

L.P., 424 S.W.3d 640, 654 & n.19 (Tex. App.—Houston [14th Dist.] 2014, pet. filed)

(correctly distinguishing Merritt on ground that Transportation Code gave

Department specific authority to make predicate decision).

2. An ultra vires claim cannot be used to interfere with a

statutory grant of discretion, such as an authorization to set

policy through administrative rulemaking.

An ultra vires claim must be dismissed if the defendant official is acting under

a grant of discretion.10 It will generally be true that, when an agency is authorized to

proceed through rulemaking, it is exercising discretion to implement the statute.

Administrative rules have the force of statutes. Rodriguez v. Serv. Lloyds Ins. Co., 997

S.W.2d 248, 254 (Tex. 1999). Both the process of adopting administrative rules and

10 Ultra vires claims must be brought against officials. To the extent the live petition seeks ultra

vires relief against state entities, those claims must be dismissed. To the extent the petition seeks to

invoke jurisdiction under § 2001.038 of the Government Code, it fails to do so, and the claims that

could be brought against the entities should, likewise, be dismissed.

the process of implementing them through contested-case proceedings are governed

by specific statutory remedies, tied to the statutory nature of rulemaking and

contested-case power. See TEX. GOV’T CODE §§ 2001.038, 2001.171, .174.

Accordingly, if a defendant’s actions do not contravene an administrative rule,

the suit is one for judicial review of the application of the rule, not a proper ultra vires

claim.

B. There is No Jurisdiction in this Case Because the Petition

Complains About a Matter Confided to Executive-Department

Discretion by SB 1747.

This Court’s precedent is clear: if a matter is conferred to agency discretion,

and the Legislature has not provided a contested-case proceeding or otherwise

subjected the determination to judicial review, there can be no ultra vires claim. The

test is whether the statute in question places the challenged determination within the

defendant’s discretion.

1. The County’s ultra vires allegations focus on an alleged

failure to exclude certain counties from the allocation based

on the purported omission of a factfinding proceeding from

the application process.

The County’s brief focuses on three supposedly ultra vires acts: failure to

exclude counties not “located in an area of the state affected by increased oil-and-

gas production,” failure to exclude counties that failed to provide a substantively

accurate road-condition report, and failure to exclude counties that did not create a

reinvestment zone. Appellant’s Br. at 30. The live petition, by contrast, seeks to

enjoin the countersigning of contracts to disburse funding with counties the court

determines to be ineligible. CR.270-71 ¶ 44. The set of actions emphasized in the

brief is barred because SB 1747 gives the Department discretion to set the

requirements for and accept county applications. And the County’s request for an

injunction betrays that its real goal is a separate, judicial determination of whether

each county is eligible to receive funding, a claim that amounts to a request for

common-law judicial review.

2. SB 1747 gives the Department discretion to set the

requirements for applications and suggests that counties

determine whether they are “affected by” oil-and-gas

production in the first instance.

Acceptance of applications is within the Department’s express discretion to

“administer” the program. SB 1747 says that the Department shall administer the

grant program and allocate the money between counties according to a particular

distribution formula. TEX. TRANSP. CODE § 256.103. It sets out requirements for

making applications and provides that the Department shall “review[]” those

applications, with a view to (1) finding additional sources of funding and (2)

improving project efficiency. Id. § 256.104(b). This review is to be performed within

30 days, with one potential extension to 60 days. Id. § 256.104(c).

Far from suggesting that the Department may not allocate funds without first

conducting a fact-finding inquiry, this statutory framework suggests that the

Department is not intended to conduct such an inquiry. SB 1747 contemplates the

processing of a large volume of applications in a maximum of sixty days, without

providing time or resources for fact finding. As confirmed by defendant’s exhibit 1,

which gathers together all the applications, there is a lot of information to be

reviewed within 60 days. See DX1. SB 1747 does not authorize contested case

proceedings, nor does it instruct the Department to verify the contents of the

applications using other information. And, aside from the descriptions of the

application contents, there is no statutory language requiring that the Department

perform any review, or apply any particular standard to the applications. Usually,

when the Legislature intends the executive department to perform quasi-judicial

actions, it imposes a particular standard of review. See Bacon, 411 S.W.3d at 180 &

n.29 (pointing out that factfinding is usually achieved through contested-case

proceedings, which must be provided for by statute). The text of SB 1747 confirms

that the grant of authority to “administer” the program necessarily includes

authority to accept formally sufficient applications from the counties as true.

SB 1747 contemplates a review of the formal requirements for making an

application under Department rules specifying the contents of such applications.

The Department comported with this requirement. The implementation of a rule

setting out the formal requirements to apply for funding is precisely the type of

discretionary activity regarding which the Court has disallowed ultra vires

challenges. E.g., Bacon, 411 S.W.3d at 180.

3. SB 1747 does not require the Department to determine

whether counties are in fact “affected by” oil-and-gas

production; it requires the counties to make that

determination.

The County’s request for injunctive relief hangs from the hook of

§ 256.103(a)’s statement that recipient counties must be affected by increased oil-

and-gas production. By arguing that courts can use evidence extrinsic to the

application process to make a separate determination that various counties were

insufficiently “affected”, the County in substance asks the Court to make a separate

judicial determination of which counties are affected by oil and gas production.

Such an inquiry would be constitutionally problematic. See infra, Part II. But

the Court need not venture into such unsafe waters because SB 1747’s grant of

discretion does not limit the Department’s ability to include counties that have

complied with the application process from an allocation of funds.

Nor does SB 1747 suggest that the Department’s authority to administer the

fund involves a separate authority to determine whether the various counties are

“affected” by oil and gas production. To the contrary, SB 1747 indicates that

decision is to be made by the counties. TEX. TRANSP. CODE § 222.1071(b) (“A

county, after determining that an area is affected because of oil and gas exploration

and production activities and would benefit from funding . . .”). Taken together with

the lack of a grant of factfinding power and the two-month deadline for incorporating

the information from all of the applications into the final allocation, this confirms the

Legislature’s intent to place the administration of the program in the Department’s

discretion, while not creating a judicially-enforceable test for inclusion in the

program based on the presence of increased oil-and-gas production in the county.

4. The non-discretionary provisions of SB 1747 encompass an

award of funds to a county that has no oil-and-gas production

at all.

If there were any question that the allocation formula could be complied with

while including counties that do not meet the County’s proposed standard for being

“affected by” oil and gas production, the allocation provision makes clear that the

Legislature authorized the resulting allocation. The allocation framework in

§ 256.103(b) is written in non-discretionary language. That provision should not be

the basis of an ultra vires claim, even if the Department mistakenly failed to meet its

requirements, see Trudy’s Tex. Star, Inc. v. City of Austin, 207 S.W.3d 894, 906 (Tex.

App.—Austin 2010, no pet.) (confirming that ultra vires claim is limited in scope,

allows government entities to make mistakes without becoming subject to suit). In

any event, the County does not argue that the Department failed to apply the correct

allocation formula and the Court need not address the more difficult issue.

The County’s primary argument is that, because § 256.103(a) says “increased

oil and gas production,” the applications had to establish the existence of increased

oil and gas production. That analysis is wrong as a textual matter; even counties with

no oil and gas production in their boundaries can be affected by oil and gas production

elsewhere, including through road damage from the heavy vehicles and machinery

commonly used in the industry. It is also irrelevant. The County’s key assertion is

that the Department should have discarded some of the applications because their

contents could be disproven. Yet the County cannot establish that there was a defect

in the application process. Because the only acts about which the County actually

complains are tied to the application process, the ultimate allocation cannot be used

to reverse-engineer a procedural defect in the application process.

C. The County’s Statutory-Construction Argument Is Wrong.

The keystone of the County’s statutory-construction argument is that, to

receive funding, a county must be experiencing “increased” oil-and-gas production

within its territory. Appellant’s Br. at 16 (putting the word “increased” in bold), 19

(arguing that this language renders portions of § 256.103(a) surplusage).

1. The County’s approach reads the words “affected by” out of

SB 1747.

The County never deals with the words “affected by” in § 256.103(a) and

throughout SB 1747. A county can be “affected by” increased oil-and-gas production

even if it is not experiencing increased production within its boundaries. To “affect”

something is “to have an influence on or effect a change in.” AM. HERITAGE

DICTIONARY (4th ed. 1994) 29; see also GARNER, A DICTIONARY OF MODERN LEGAL

USAGE (2d ed. 1995) 34 (“to influence; to have an effect on”).11 Increased oil-and-

gas production can, self-evidently, “have an effect on” neighboring counties, or

counties through which oil and gas, or the equipment used to produce it, is

transported.

The County points to in the statute that ties the availability of funding to the

presence of increased oil-and-gas production. Instead, it highlights the word

“increased” and implies from it that any funding must be tied to production. The

statutory allocations belie that reading of the statute. Four of the allocation

categories are pegged to oil-and-gas production rates. TEX. TRANSP. CODE

§ 256.103(b)(2-4) (pegging allocation to oil-and-gas production taxes, well

completions, and volume of oil-and-gas waste injected). These provisions do not tie

the allocation to an increase in oil and gas production, but merely to the relative rate

of oil and gas production in the various counties. The remaining category, set out by

§ 256.103(b)(1) is not directly tied to oil-and-gas production rates, but rather to

weight tolerance permits. Id. § 256.103(b)(1). This makes sense, because the

equipment required to produce oil and gas may have to traverse other counties,

11The definition of “[t]ransportation infrastructure project” does not help the County either. See

TEX. TRANSP. CODE § 256.101(2) (such projects are to “alleviate degradation caused by the

exploration, development, or production of oil or gas”). Counties without oil-and-gas production

or without increased oil-and-gas production may nonetheless be “affected” by increased

production because oil-and-gas material is transported across them.

causing them to be “affected by” increased oil-and-gas production generally. The

inclusion of § 256.103(b)(1)’s allocation of 20% of the funding confirms the

Legislature’s recognition that a county need not be experience an increase in oil-and-

gas production to be “affected by” an increase in oil-and-gas production generally.

2. Nothing in SB 1747’s pre- and post-enactment legislative

history changes the statutory analysis.

Legislative history is disfavored in Texas, applying only to resolve ambiguities

in statutory text. E.g., Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 442-43

(Tex. 2009). The touchstone for legislative intent is the language adopted by the

Legislature as a body, not the positions of individual legislators. Id. at 437 (citing

State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006)). While consideration of pre-

enactment legislative history is permissible, it is not treated as dispositive in the face

of statutory text. Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., Inc., 236

S.W.3d 190, 195 & n.20 (Tex. 2007) (confirming principle announced by Fleming

Foods v. Rylander, 6 S.W.3d 278, 283-84 (Tex. 1999)). Post-enactment history is even

less useful, serving at most to highlight research into the Legislature’s goals. See Ojo

v. Farmers Grp., Inc., 356 S.W.3d 421, 430-31 (Tex. 2011) (emphasizing result of

study ordered when statute was enacted); see also id. at 436-37 (Jefferson, C.J.,

concurring) (pointing out that post-enactment history was not used to “construe”

the statutory language).

a. The pre-enactment versions of SB 1747 cannot change

its plain language.

The County argues that the conference committee’s resolution of

inconsistencies between the House and Senate bills supports its view. Appellant’s

Br. at 24-26. The County characterizes the inclusion of § 256.103(a) as the adoption

of the structure of the House bill, which would have focused on increased energy

production. But the retention of a sentence from the House version of the bill is not

particularly elucidating as to the effect of the SB 1747’s plain text as enacted.

The County further relies on a Senate Research Center analysis for the

proposition that SB 1747 was to target areas that had “suffered the most.”

Appellant’s Br. at 26. It relies on that language far too much, as research center

analysis is not legislative history regarding a bill’s legal effect. A bill analysis does not

manifest the Legislature’s—or for that matter the committee’s—intent as a body. It

is not voted on. Rather, it includes a statement of the author’s or sponsor’s intent

but is drafted by the Senate Research Center without legislative oversight.12 The

language on which the County relies is merely a statement of the sponsor’s intent.

And it is not, as the County suggests, an indication of the intent for the final version

of the bill: the sponsor’s statement is unchanged from the original research-center

report. Compare Senate Research Center, Bill Analysis, SB 1747, 83d Leg. R.S.

12 www.senate.state.tx.us/SRC/BA.htm; see also TEX. SENATE RULE 7.12(b)(10).

(2013) (filed version) (first paragraph of sponsor statement), with Senate Research

Center, Bill Analysis, SB 1747, 83d Leg. R.S. (2013) (enrolled version) (identical

text).

At any rate, that language does not necessarily support the County’s position.

That SB 1747 provides a long-term plan that will benefit areas with oil-and-gas

production does not necessarily foreclose the possibility that funds will be available

throughout the transportation system in recognition of the fact that the entire

transportation network is stressed by increased oil-and-gas production.

Moreover, there is plenty of legislative history to suggest that the funding was

extended state-wide as part of a compromise to gain passage. One Legislator focused

on the fact that “nearly every county could stand to benefit.” Testimony of Senator

Uresti, Hearings on Tex. SB 1747 Before the Senate Comm. on Transp., 83d Leg.,

R.S. at 01:35:44 (Apr.10, 2013) (Appendix Tab A).13 The La Salle County Judge was

plainly aware at the time of the hearings that SB 1747 encompassed all 254 counties.

Testimony of La Salle County Judge, Hearings on Tex. S.B. 1747 Before the House

Comm. On Energy Res., 83d Leg., R.S. (“you have 254 counties that have to set up

and to comply with your issues on your reports and projects.”) (Appendix Tab A).

13 available at http:/tlcsenate.granicus.com/MediaPlayer.php?view_id=9&clip_id=358, at

01:35:44 (“While today I highlight the explosive growth of the Eagle Ford Shale as an example of

why this Bill is needed, it will not only apply to the Eagle Ford Shale. Based on the matrix in this Bill

nearly every county could stand to benefit . . .”).

These statements are consistent with Senator Uresti’s post-enactment statements

regarding the bill, which he portrays as a compromise: he had to make all counties

eligible for funding in order to overcome entrenched opposition to appropriating

state money to county road projects. Aman Batheja, Lawsuit Over Road Funding

Program Leaves Funds in Limbo, Texas Tribune (May 15, 2014) (“Senator [Uresti] .

. . believes [the Department] was following the law correctly. . . . the version [of SB

1747] that passed was changed to make more counties eligible for the funding.”).14

In short, the County points to the sponsor’s intent in the original bill. The

Department has provided contemporaneous and post-legislative history from the

sponsor indicating that the purpose of the bill changed over the course of enactment.

To the extent that legislative history is relevant to this case, it ultimately favors the

Department’s position because the only evidence to support the County is tied to

statements regarding the House version of the bill, rather than the text of SB 1747 as

enacted following conference.

b. The post-enactment statements of legislators at most

reflect their preference for statutory language the

House passed, but that did not survive conference.

The County also cites a colloquy at a post-enactment oversight hearing for the

proposition that individual representatives believed SB 1747 would have a different

14 Available at www.texastribune.org/2014/05/15/lawsuit-over-road-funding-program-leaves-

funds-lim.

effect. See Appellant’s Br. at 27-29 (discussing Hearing, Select Committee on

Transportation Funding, Expenditures & Finance, 83d Leg., R.S. (May 6, 2014)

(5:46:18)). This colloquy is merely the post-enactment statement of individual

legislator’s beliefs about a past-Legislature’s actions. (And it appears to focus on the

House version of the bill, which, the County points out, was more limited in scope.

See Appellant’s Br. at 25 (discussing House Alternative Bill, Tex SB 1747, 83rd Leg.,

R.S. (2013) (May 22, 2013))).

Complaints by members of a house committee about their intent for a bill is

not a proper basis for using post-enactment history to understand the version of the

bill generated by the conference committee and voted upon by the entire Legislature.

Particularly when, in context, the post-enactment legislative history appears to be

aimed at the version of the bill passed by that committee and that house of the

Legislature, as opposed to the ultimate statutory language adopted by the Legislature

after the conference process.

3. The County’s invocation of administrative deference makes

no sense, given that the County seeks to avoid the procedural

mechanisms in which that deference applies.

The County suggests that the Department acted ultra vires to the portions of

the rule that track the statute. Appellant’s Br. at 22-23. Quixotically, the County

labels this as an issue of agency deference. Id. at 22. That makes no sense.

Administrative deference applies to an agency’s interpretation of a statute in its own

rules. E.g., RR Comm’n v. Tex. Citizens for a Safe Future and Clean Water, 336 S.W.3d

619, 625 (Tex. 2011) (upholding agency interpretation so long as construction “is

reasonable and does not contradict the plain language of the statute” (citation

omitted)). When deference occurs, a court chooses to leave an agency’s resolution

of statutory ambiguity in place, so that a subsequent administration is at liberty to

reach the opposite result. Id.; see also Nat’l Cable & Telecomms. Ass’n v. Brand X

Internet Servs., 545 U.S. 967, 1018-19 & n. 14 (2005) (Scalia, J., dissenting)

(highlighting distinction between accepting administrative body’s interpretation of

a statute and judicial construction of that statute).

What the County advocates is not deference, but rather judicially-imposed

administrative sclerosis. The County’s approach would frustrate the purpose of

deference by locking one view of the statute in stone. And it would do so in a strange

way. The rules for the most part track the statute, but the County seeks to use the

tracking as a form of deference that precludes the Department and its officials from

making an entire category of statutory-construction claim. It bases that argument on

the presupposition that the rules should have prevented the Department from

accepting certain applications without pointing to a provision in the rules that

actually requires independent verification of the facts presented. The county’s

approach is deeply at odds with the administrative flexibility that is at the heart of

the deference doctrine.

D. The County Has a Judicial Remedy to Match its Legal Theory: a

§ 2001.038 Suit that Would, if Successful, Impact Future

Allocations.

That the County cannot bring an ultra vires claim based on the application of

an administrative rule does not leave the County without a judicial forum in which

to advance its legal theory that SB 1747 requires a separate administrative

determination that the applications are accurate. It could bring suit under § 2001.038

of the APA, challenging the rule as invalid for failure to include a separate fact-

finding procedure.

The remedy in such a suit would not encompass the allocation of the $225

million on which the County bases its complaint, because § 2001.038 does not apply

to past applications of administrative rule and can result only in a declaratory

judgment regarding the legal status of the rule itself. TEX. GOV’T CODE § 2001.038;

Slay v. Tex. Comm’n on Envtl. Quality, 351 S.W.3d 532, 544-45 (properly explaining

scope of § 2001.038 suit and relief). But the remedy in such a lawsuit would govern

future allocations, assuming the County could otherwise satisfy the jurisdictional

prerequisites for bringing suit within its waiver of immunity.15 The Court need not

15Alternatively, inherent judicial review could, in theory, trigger a new allocation process. But the

County has has not attempted to invoke the Court’s inherent judicial-review power. And it is not

clear that it could do so, given that an applicant for government funding does not have a vested

property interest in receiving that funding. E.g., Butler Weldments Corp. v. Liberty Mut. Ins. Co., 3

S.W.3d 654, 659-60 (Tex. App.—Austin 1999, no pet.); S.C. San Antonio, Inc. v. Tex. Dep’t of

Human Servs., 891 S.W.2d 773, 778 (Tex. App.—Austin 1995, writ denied).

address the issue in this appeal, because the petition in effect disclaims any attempt

to invoke § 2001.038’s waiver of immunity from suit as construed in this Court’s

precedent. See infra, Part II.D.

II. THE COUNTY’S VIEW OF THE ULTRA VIRES CAUSE OF ACTION IGNORES

THE COMMON LAW AND WOULD CREATE AN UNCONSTITUTIONAL SYSTEM

FOR REVIEWING ADMINISTRATIVE ACTION.

Because the County presumes that ultra vires jurisdiction is available to review

the application of an administrative rule, in derogation of the common law and the

Administrative Procedure Act, it does not fully articulate a theory of the ultra vires

cause of action as a basis for judicial review of executive-department action. This is

in part for good reason: any discussion of the case law would highlight the problems

inherent in treating the ultra vires cause of action as a basis for common-law judicial

review. See supra, Part I.A.

The necessary implications of the County’s views are clear from its brief and

pleadings. The County seeks to undo the acceptance of the applications, which

would change the allocation calculations. And it seeks a judicial determination that

certain counties are not “affected by” increased oil-and-gas production, based on

extrinsic evidence and legislative history. This second request asks the Court to

proceed based on the policy justifications for the County’s view of SB 1747, rather

than the statute’s plain text and the Department’s implementation of that text in the

administrative rule.

In the County’s view all this judicial activity is OK, because the remedy would

be an injunction against distributing the money. Appellant’s Br. at 31-32 (suggesting

that the cause of action is available because the form of the remedy is appropriate).

It is not OK. The County flouts the common law, ignores the APA, and its

approach would, if adopted, be unconstitutional under decades of Texas Supreme

Court precedent governing the availability of judicial review of administrative

actions.

A. The County’s Lawsuit Is, In Effect, An Improper Attempt to Seek

Common-Law Judicial Review of Administrative Action.

The allocation has already occurred, and disbursement of the $225 million at

issue in this case is mandated by it. Because the County seeks to reach back in time

and undo something the agency has already done, it is necessary to review how the

common law and the judicial-review provisions of the APA interact.

There is no common-law right to judicial review of administrative actions

unless the order adversely affects a vested property right or otherwise violates the

Constitution. Little-Tex, 39 S.W.3d at 599; see also, e.g., Tex. Comptroller of Pub.

Accounts v. Walker Electric Co., LLC, No. 03-13-00285-CV, 2014 WL 6612431, at *4-

*6 (Tex. App.—Austin Nov. 21, 2014, reh’g filed) (mem. op.) (recognizing that not

every administrative action is subject to contested-case proceedings or judicial

review). Accordingly, some executive-department actions are unreviewable. Gulf

Land Co. v. Atl. Ref. Co., 134 Tex. 59, 73-74, 131 S.W.2d 73, 82 (1939); TEX. CONST.

art. II, § 1. Any (non-constitutional) rights related to the form or substance of an

administrative rule are created by the APA itself and are, therefore, entirely

statutory. E.g., City of Amarillo v. Hancock, 150 Tex. 231, 233, 239 S.W.2d 788, 790

(1951). The Legislature has the authority to provide a statutory right that has no

judicial recourse at all, even though the courts must be able to hear constitutional

claims. E.g., Houston Mun. Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 157-58 (Tex.

2007).

The ultra vires cause of action against defendant officials cannot be construed

as a basis for reviewing application of administrative rules—otherwise, it would serve

as the very grant of common-law judicial review that Little-Tex disclaims. See supra,

Part I.A (collecting cases).

Nor does the APA provide for the general judicial review of administrative

action the County seeks through its ultra vires claim. The APA maintains the

common law’s concern about balancing the respective roles of the judicial and

executive departments. For example, the “substantial evidence” rule for agency

contested-case determinations not only sets the parameters on a waiver of immunity

from suit, see Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145

S.W.3d 170, 198 (Tex. 2004), but it embodies a pre-existing common-law standard

framed to avoid separation-of-powers problems, e.g., Fire Dep’t of City of Fort Worth

v. City of Fort Worth, 147 Tex. 505, 509-510, 217 S.W.2d 664, 666 (1949). The

touchstone of this inquiry is that the court rules on the reasonableness of the body’s

order, not its correctness. E.g., Tex. Health Facilities Comm’n v. Charter Med.-

Dallas., Inc., 665 S.W.2d 446, 452 (Tex. 1984). If courts were to do more—by

resolving policy matters based on their own preferences—the administrative process

would be rendered meaningless.

Likewise, § 2001.038 of the APA allows declaratory relief related to the

“applicability” of an administrative rule, but not to that rule’s application. See TEX.

GOV’T CODE § 2001.038(a). Accordingly, a § 2001.038 claim cannot be used to undo

past administrative action under an administrative rule.

The most important point, though, is that the APA’s procedural requirements

for judicial review go hand in hand with the legislative creation of administrative

power and the limitations on the concomitant grant of judicial review. As explained

above, see supra, Part I.A, some discretionary agency actions are not subject to

judicial review. And allowing such review under the cover of an ultra vires claim

would upend both the statutory framework of the APA and the underlying

constitutional structures on which judicial review of executive-department action is

based.

B. The County’s Argument Improperly Takes the Form of the Relief

it Seeks as the Basis for Establishing Jurisdiction Over the

Substance of its Claim.

The County asserts that, because it seeks a prospective injunction to halt

future payments of money, it need not worry about the interaction of the common

law and the APA in establishing Texas law governing judicial review of executive-

department action. This approaches focuses on one tree. It misses the forest.

A lawsuit does not become a proper subject of ultra vires proceedings merely

because it involves a request to enjoin the expenditure of money; rather, an

injunction requiring future payments of money is an appropriate remedy in a proper

ultra vires claim. See Heinrich, 284 S.W.3d at 377-78. The jurisdictional question is

whether the petition describes an act outside the defendant official’s discretion. The

defendants in this case had discretion to adopt the administrative rules, and those

rules are subject to review under § 2001.038. It does not become proper to sidestep

the APA’s requirements, or to challenge the substance of an already final

administrative determination, merely because the form of the remedy is appropriate:

exceptions to immunity depend on the substance of the question asked, not the form

of the relief requested. See, e.g., Livingston v. Beeman, 408 S.W.3d 566, 573 (Tex.

App.—Austin 2013, pet. granted) (immunity bars suits to control state action in any

form, and suits to require payment of money are a subset of this bar).

C. The County’s Reliance on Extrinsic Evidence Would Lead to a

Constitutionally Defective System of Administrative Rule.

If the Court adopted the County’s position and allowed a suit to challenge the

allocation based on information not found in the applications, the resulting

proceeding would violate the Texas Constitution by allowing a court to review an

administrative agency’s actions based on an extrinsic record.

1. The County seeks to invalidate the allocation based on

extrinsic evidence.

While the County focuses on the acceptance of the applications as the

allegedly ultra vires act, much of its argument is tied up with showing that, as a matter

of judicially-determined fact, at least some counties are not “affected by” oil-and-

gas production. Thus, the County not only tries to sidestep the bar on judicial review,

it also seeks a judicial determination that would not be available in judicial review.

2. Even a statutory judicial-review mechanism based on this

type of evidentiary inquiry would violate the Texas

Constitution.

This type of judicial review, in which a court recreates an administrative

determination using a new record made before it, has been repeatedly rejected by the

Texas Supreme Court as inconsistent with Article II, § I of the Texas Constitution.

E.g., Davis v. City of Lubbock, 160 Tex. 38, 59-60, 326 S.W.2d 699, 714 (1959);

The APA has been framed to respect this limit. The touchstone of this inquiry

is that the court rules on the reasonableness of the body’s order, not its correctness.

E.g., Charter Med.-Dallas, 665 S.W.2d at 452. Thus, the Court has struck down

statutes requiring more than substantial-evidence review as constituting an

overreach of judicial authority. Davis, 160 Tex. at 59-60, 326 S.W.2d at 714; Fire

Dep’t of Fort Worth, 147 Tex. at 509-510 217 S.W.2d at 666 (statute requiring trial de

novo is unconstitutional unless construed to require substantial-evidence review

based on new record made in trial court); but see Key W. Life Ins. Co. v. State Bd. of

Ins., 163 Tex. 11, 26, 350 S.W.2d 839, 849-850 (1961) (allowing de novo review when

issue was one otherwise entrusted to courts).16

Section 2001.038’s mechanism for review of administrative rules conforms to

the limited nature of judicial review of executive-department action provided by the

Legislature. A § 2001.038 declaratory-judgment action is directed at the rule

generally and cannot be used to address the outcome of a particular dispute. E.g.,

Friends of Canyon Lake, Inc. v. Guadalupe-Blanco River Auth., 96 S.W.3d 519, 529

(Tex. App.—Austin 2002, pet. denied) (recognizing that a § 2001.038 claim could

not revive a defaulted suit for judicial review). It can result only in a determination

whether the rule is “valid” or “applicable,” and a plaintiff must adequately plead

one of those two claims to invoke its provisions. See City of Webster, 311 S.W.3d at

100. The cause of action provided by § 2001.038 is the sole mechanism for

articulating any claim that an administrative rule is outside an entity’s authority,

because without its provisions there would be no procedural mechanism to challenge

the rule on that type of ground.

16 Davis and Fire Department of City of Fort Worth rely on the separation of powers and do not

discuss Article I, § 28, but the suspension-of-laws prohibition equally supports their holdings, as it

does the other cases in which the Court has held that too broad a role for the courts in the

administrative review process violates the Constitution. E.g., S. Canal Co. v. State Bd. of Water

Eng’rs, 159 Tex. 227, 232-34, 318 S.W.2d 619, 622-24 (1958) (striking down a statute because of

standard of review); Gerst v. Nixon, 411 S.W.2d 350, 354 (Tex. 1967) (striking down statute

allowing court to determine the public good by preponderance of the evidence); Chem. Bank &

Trust Co. v. Falkner, 369 S.W.2d 427, 432-33 (Tex. 1963) (striking down statute allowing de novo

review of quasi-legislative determination); see also George D. Braden, et. al, THE CONSTITUTION

OF THE STATE OF TEXAS; AN ANNOTATED AND COMPARATIVE ANALYSIS, vol. 1, at 93-94 (1977).

D. While the County Would Be Entitled to Raise its Legal Arguments

in a Properly-Pleaded § 2001.038 Claim, There is No Proper

§ 2001.038 Claim in this Appeal.

As explained above, the proper forum for the County’s legal arguments is a

§ 2001.038 claim. That is not an issue based on the live petition, which does not even

attempt to meet the elements of a § 2001.038 claim. The Court should affirm the

dismissal in this case, because while those arguments might be brought in a

§ 2001.038 claim, that is not the claim, nor the form of relief, that the County

currently seeks.

1. Section 2001.038 is a waiver of sovereign immunity and must

be so construed.

Section 2001.038 provides:

Declaratory Judgment

(a) The validity or applicability of a rule, including an emergency rule

adopted under Section 2001.034, may be determined in an action for

declaratory judgment if it is alleged that the rule or its threatened

application interferes with or impairs, or threatens to interfere with or

impair, a legal right or privilege of the plaintiff.

***

TEX. GOV’T CODE § 2001.038. It is a waiver of immunity from suit. E.g., Slay, 351

S.W.3d at 544-45 ; see also Tex. Logos, L.P. v. Tex. Dep’t of Transp., 241 S.W.3d 105,

123 (Tex. App.—Austin 2007, no pet.) (holding that § 2001.038 “is a grant of

original jurisdiction and, moreover, waives sovereign immunity”).

The scope of the cause of action described in a statutory waiver of immunity

defines the scope of the lawsuit that may be brought. E.g., Kerrville State Hosp. v.

Clark, 923 S.W.2d 582, 584-85 (Tex. 1996). The scope of the waiver must be based

on plain text, with any ambiguity resolved in favor of retaining immunity. Wichita

Falls State Hosp. v. Taylor, 106 S.W.3d 692, 697 (Tex. 2003); TEX. GOV’T CODE

§ 311.034.

Plain text makes this case straightforward. First, while the cause of action

encompasses all challenges to the legal validity of a rule, it requires that they be

brought in the form of “an action for declaratory judgment.” The APA contains no

mention of injunctive relief. Second, an agency must be joined to the lawsuit. This

requirement makes the cause of action something other than a background suit for

ultra vires relief, which serves the more limited purpose of enjoining illegal executive-

department activity. Third, any claim must be tied to a “right or privilege.” The

scope of a plaintiff’s suit is thus circumscribed by text—an interested third party, or

one who is merely injured but has no “right” or “privilege,” cannot institute suit.

Section 2001.038’s scope is limited “solely to the extent of permitting suits

against state agencies for declaratory relief concerning the validity or applicability of

their rules.” Tex. Health & Human Servs. Comm’n v. El Paso Cnty. Hosp. Dist., 351

S.W.3d 460, 487 (Tex. App.—Austin 2011), aff’d 400 S.W.3d 72 (Tex. 2013).

“Validity” challenges extend to any substantive or procedural challenge that would

deprive a rule of legal effect. City Pub. Serv. Bd. of San Antonio v. Pub. Util. Comm’n,

96 S.W.3d 355, 359 (Tex. App.—Austin 2002, no pet.). Thus, the plain text of

§ 2001.038 encompasses all claims that an administrative rule is invalid by operation

of statute, even though purely constitutional claims can be brought outside of its

requirements.

2. The County’s petition does not identify a “rule.”

To fall within the waiver of immunity, a plaintiff must identify a “rule” to be

challenged. TEX. GOV’T CODE § 2001.038(a). Failure to identify a specific statement

that meets the APA’s statutory definition of a “rule” is a jurisdictional defect. City

of Webster, 311 S.W.3d at 100-01. The live petition in this case does not identify a

particular rule; rather, it conditionally seeks § 2001.038 relief regarding “any

TxDOT rules . . . to the extent that they depart from the statute”). CR.272; see also

Appellant’s Brief at ix (describing § 2001.038 claim as “contingent”).

Referring to “any rules” does not identify “a” rule. Moreover, as explained

above, §2001.038 is not a waiver of immunity for the construction of administrative

rules. It is a cause of action that potentially strikes down the rule as invalid or

prohibits its application to a particular set of facts. It is not a general grant of authority

to perform administrative decision-making on behalf of a defendant administrative

agency.

3. The County’s petition does not articulate a “right or

privilege” necessary to establish standing or a waiver of

immunity.17

The County’s interest in the applications was not that of a program

participant, which has at least some expectation of funding that could, depending on

the governing law, be vested in nature. Rather, it was a prospective applicant for

funding from a program subject to an allocation process.

The only “right or privilege” referenced in the live petition is the prospect of

the County’s request for money being “underfunded relative to what the statute

commands.” CR.154. There is no other articulation of a “right or privilege.” This

interest, however, is not tied to the actual legal complaints on which the County tries

to establish jurisdiction, all of which have to do with the acceptance of the

applications. See supra, Part I.B. The only way for the grant to be “underfunded”

under SB 1747, would be for the Department to refuse to apply the allocation formula

17 The Department notes its disagreement with the Court’s suggestion in an earlier case that

§ 2001.038’s waiver of immunity extends to any claim for which there is constitutional standing,

Tex. Dep’t of State Health Servs. v. Balquinta, 429 S.W.3d 726, 741 (Tex. App.—Austin 2014, pet.

filed), which is at odds with its previous announcements that failure to identify a right or privilege

is a bar to suit, see Tex. Dep’t of Pub. Safety v. Salazar, 304 S.W.3d 896, 906 (Tex. App.—Austin

2009, no pet.) (plaintiffs who had no “privilege” could not pursue suit); State v. BP Amer. Prod.

Co., 290 S.W.3d 345, 363 (Tex. App.—Austin 2009, pet. denied) (narrowly construing provision’s

immunity waiver to bar suit to determine title as predicate to bringing suit based on privilege, and

dismissing for failure to establish privilege). That issue is not directly raised here, because the

County’s reliance on its entitlement to a particular amount of funding constitutes a pleading defect

under either standard.

to counties whose applications are formally complete. The County does not so

allege.18

To be sure, pleading omissions can usually be cured on remand. But remand

would be inappropriate in this case, because the County should have brought an

entirely different lawsuit. The proper mechanism to bring its claims is a suit for a

declaration that the rule is inconsistent with the text of SB 1747, the result of which

would control future allocations. Rather than remanding, the Court should render

judgment of dismissal and note that the County can seek different relief under a

different legal theory in a different lawsuit.

4. Even if the County’s jurisdictional views were correct, its

claim necessarily fails.

The County embraces the idea that, if it can demonstrate that the ultimate

result of the allocation violates judicial interpretation of SB 1747, it is appropriate to

impose a judicial order attacking the underlying administrative determinations,

including the acceptance of the applications. Even assuming that were so—and it is

not because allowing such suits would ignore the common law and gut the APA—

the County would lose under its own theory. The use of the word “increased” in

§ 256.103(a) cannot render the words “affected by” in the same provision a nullity,

18In the trial court, the County also suggested that there is general authority to challenge

implementation of a rule under § 2001.038. That argument is foreclosed by precedent. Guadalupe-

Blanco, 96 S.W.3d at 529.

nor can it wipe away the remainder of SB 1747, which both contemplates awards of

funding based on a metric not directly related to oil-and-gas production and suggests

that if anyone is to make an “affected by” determination, it is the counties. See supra,

Part I.C.1. Because the result is not foreclosed by statute, it cannot be a jurisdictional

basis for challenging the procedure that produced it.

* * *

The County emphasizes that its view of SB 1747 is, at least, a reasonable one.

Appellant’s Br. at 28-29. But that point sinks the County’s battleship. There are

often multiple reasonable readings of a statute. The administrative process is

designed so that executive-department entities get to choose between reasonable

alternatives. Structurally, that means that the mechanisms for judicial review are

designed to prohibit the courts from addressing statutory constructions in the

abstract, thereby depriving agencies of discretion. The County’s lawsuit seeks to

sidestep those procedural requirements and, by extension, the substantive principles

they protect. Its lawsuit should be dismissed.

III. THE COURT SHOULD NOT ISSUE AN APPELLATE INJUNCTION.

The County’s request for an appellate injunction fails because (1) it

improperly presumes that it is possible to enjoin the dispersal of funds while the

administrative rules remain unchallenged; and (2) there is no precedent to hold a

state-wide funding program hostage to one county’s complaint that it should have

received more money.

The County argues that an injunction is appropriate because the corpus of the

$225 million will be disbursed under the allocation. But the administrative rules

governing unexpended funds, which the County does not challenge are clear. Any

excess funding must be reallocated through the entire process, and is not subject to

disbursement under the current allocation. 43 TEX. ADMIN CODE § 15.186(a). And if

a project comes in under budget, a county may use the unexpended balance for only

a one year period. 43 TEX. ADMIN. CODE § 15.194. The County’s suggestion that an

injunction is appropriate because it would impact each subsequent disbursement of

money for particular projects ignores that (1) it is the initial allocation that controls

the amount of funding available; (2) if there is too much money allocated, there must

be a new allocation; and (3) if projects come in under budget, there are time limits

on using the money. In short, the real substance of the County’s claim is

retrospective in nature because it seeks to go back and undo the predicate

administrative action on which subsequent disbursements are based. As a result,

there is to enjoin. And a retrospective order is not only barred by immunity, see supra,

Part I.A.1, but it violates the principles governing writs of appellate injunction, which

must be based on a current, enforceable right, not the ultimate litigation outcome

sought by the plaintiff, see Mote Res. Inc. v. RR Comm’n, 618 S.W.2d 877, 879 (Tex.

Civ. App.—Austin 1981, no writ) (distinguishing between current state of affairs and

ultimate relief requested).

Appellate injunction extends only to orders that protect appellate jurisdiction.

TEX. CONST. art. V §6(a); e.g., Madison v. Martinez, 42 S.W.2d 84, 86 (Tex. Civ.

App.—Dallas 1931, writ ref’d). The burden is restrictive, far more than required to

preserve the status quo ante in a temporary injunction. See Baird v. Sam Houston Elec.

Coop, 627 S.W.2d 732, 733-34 (Tex. App.—Houston [1st Dist.] 1981) (orig.

proceeding) (per curiam). The Court lacks authority to issue the writ merely to

preserve the parties from harm pending appeal. Id.

The County cannot meet its burden. In Mote Resources, for example, the

property right already existed and would have been extinguished by court action

prior to final judgment. But in this case, the County’s participation in the program is

not destroyed by disbursements from the fund. The request for an injunction

improperly seeks the judgment the County wants, rather than preserving a legal right

the County already has.19

19The County points to the policy discussion in the Texas Supreme Court’s most recent decision

on governmental supersedeas to suggest that any temporary relief would have been meaningless.

Appellant’s Br. at 35 n.10 (citing In re State Board for Educator Certification, No. 13-0537, 2014 WL

7204548 (Tex. Dec. 19, 2014) (orig. proceeding)). That assertion misses the point: while temporary

relief may be available in some instances, it remains the case that the appellant is required to assume

the financial risk inherent in leaving the judgment in place, see TEX. R. APP. P. 24.2(a)(3). It is

unclear that a single plaintiff could necessarily propose a sufficient bond to address the financial

problems inherent in delaying a state wide road-funding measure through the entire appellate

process.

PRAYER

The Court should affirm the trial court’s judgment.

Respectfully submitted.

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

SCOTT A. KELLER

Solicitor General

_/s/ Kristofer S. Monson_

KRISTOFER S. MONSON

Assistant Solicitor General

State Bar No. 24037129

OFFICE OF THE ATTORNEY GENERAL

P.O. Box 12548 (MC 059)

Austin, Texas 78711-2548

Tel.: (512) 936-1820

Fax: (512) 474-2697

kristofer.monson@texasattorneygeneral.gov

COUNSEL FOR APPELLEES

CERTIFICATE OF SERVICE

On February 20, 2015, this brief was served via File & ServeXpress on:

Don Cruse

Law Office of Don Cruse

1108 Lavaca St., #110-436

Austin, Texas 78701

don.cruse@texasappellate.com

COUNSEL FOR APPELLATE

/s/ Kristofer S. Monson

Kristofer S. Monson

CERTIFICATE OF COMPLIANCE

In compliance with Texas Rule of Appellate Procedure 9.4(i)(2), this brief

contains 10,412 words, excluding the portions of the brief exempted by Rule

9.4(i)(1).

/s/ Kristofer S. Monson

Kristofer S. Monson

Appendix

Table of Contents

Legislative History Transcriptions................................................................ A

Relevant Provisions of SB 1747 ..................................................................... B

SB 1747 – LEGISLATIVE HISTORY TRANSCRIPTIONS

83d Leg., R.S.

Date Committee Time Speaker Transcription

04/10/13 Senate Comm. on 01:35:44 Sen. Carlos "While today I highlight the explosive

Transportation Uresti growth of the Eagle Ford Shale as an

example of why this Bill is needed, it will

not only apply to the Eagle Ford Shale.

Based on the matrix in this Bill nearly

every county could stand to benefit

including those in the Barnett Shale, the

Permian Basin, or future plays such as the

Eaglebine or Cline. Senate Bill 1747 is a

result of numerous meetings and

compromise with county and local

government officials, oil and gas industry

representatives, various groups and

associations, and state agencies, in an

attempt to infuse resources to help address

the degradation of the transportation

infrastructure associated with the oil and

gas activities. Members, generally Senate

Bill 1747 would provide a funding

mechanism that will allow counties to

qualify for immediate funds from the grant

program. Funds would be distributed

based on the number of well completions,

the number of weight tolerance permits,

and the taxes collected from production for

each county."

05/08/13 House Comm. on 00:49:24 La Salle"I'm concerned about the time line in

Energy Resources County Judge reference to setting it up. The time line

Joelbecause you have 254 counties that have to

Rodriguez, Jr.

set up and to comply with your issues on

your reports and projects and things that

are needed."

05/06/14 House Select 05:46:19 TxDOT "I was kind of surprised that my county

Comm. on Representative was being included in any type of money

Transportation coming from this when that's not what I

Funding thought when it was presented before the

Legislature; surely not afterwards .... how

it was rolled out was a little different than

I expected.”

AFFIDAVIT OF MICHELLE BLASKOVICH

THE STATE OF TEXAS $

COUNTY OF TRAVIS $

"My name is Michelle Blaskovich. I am a Legal Assistant with the Ofhce of

Attorney General, Solicitor General's Office. I am over the age of eighteen (18) years and

fully competent to testify herein. The facts stated herein are within my personal and

professional knowledge and are true and correct'

"Attached is a series of excerpts of debates held on the floor of the Texas House

and Senate in April and May of 2013, relating to Senate Bill 1747 (83R)' Using the

personal computer in my office, I obtained these items by accessing the video archives of

the Texas Legislative Council. I listened to the aforementioned proceedings, at my

computer, and using my computer, transcribed the proceedings. The attached excerpts are

a true and accurate rendition of the aforementioned debates that I transcribed to the best of

my ability.

"I have read the above and foregoing Affidavit, consisting of this and the

attachment, and swear that it is true and correct.

..FURTHER AFFIANT NOT."

$Pr\

Michelle Blaskovich, Aff,rant

SUBSCRIBED AND SWORN TO before me, the undersigned authority, on this

20th of February, 20

Public, State of Texas

CECILIA ANN HERTEL

Notary Public

STATE OF TEXAS

Commission ExP, OCI 02, 2018

Notary without Bond

Relevant Provisions of SB 1747

§ 256.103. Grant Program

(a) The department shall develop policies and procedures to administer a grant

program under this subchapter to make grants to counties for transportation

infrastructure projects located in areas of the state affected by increased oil

and gas production. The department may adopt rules to implement this

subchapter.

(b) Grants distributed during a fiscal year must be allocated among counties as

follows:

(1) 20 percent according to weight tolerance permits, determined by the

ratio of weight tolerance permits issued in the preceding fiscal year for

the county that designated a county energy transportation

reinvestment zone to the total number of weight tolerance permits

issued in the state in that fiscal year, as determined by the Texas

Department of Motor Vehicles;

(2) 20 percent according to oil and gas production taxes, determined by

the ratio of oil and gas production taxes collected by the comptroller in

the preceding fiscal year in the county that designated a county energy

transportation reinvestment zone to the total amount of oil and gas

production taxes collected in the state in that fiscal year, as

determined by the comptroller;

(3) 50 percent according to well completions, determined by the ratio of

well completions in the preceding fiscal year in the county that

designated a county energy transportation reinvestment zone to the

total number of well completions in the state in that fiscal year, as

determined by the Railroad Commission of Texas; and

(4) 10 percent according to the volume of oil and gas waste injected,

determined by the ratio of the volume of oil and gas waste injected in

the preceding fiscal year in the county that designated a county energy

transportation reinvestment zone to the total volume of oil and gas

waste injected in the state in that fiscal year, as determined by the

Railroad Commission of Texas.

§ 256.104. Grant Application Process

(a) In applying for a grant under this subchapter, the county shall:

(1) provide the road condition report described by Section 251.018 made

by the county for the previous year; and

(2) submit to the department:

(A) a copy of the order or resolution establishing a county energy

transportation reinvestment zone in the county, except that the

department may waive the submission until the time the grant is

awarded; and

(B) a plan that:

(i) provides a list of transportation infrastructure projects to be

funded by the grant;

(ii) describes the scope of the transportation infrastructure project

or projects to be funded by the grant using best practices for

prioritizing the projects;

(iii) provides for matching funds as required by Section 256.105; and

(iv) meets any other requirements imposed by the department.

(b) In reviewing grant applications under this subchapter, the department shall:

(1) seek other potential sources of funding to maximize resources

available for the transportation infrastructure projects to be funded by

grants under this subchapter; and

(2) consult related transportation planning documents to improve project

efficiency and work effectively in partnership with counties.

a grant application before the 31st day after the date the department receives

the application. The department may act on an application not later than the

60th day after the date the department receives the application if the

department provides notice of the extension to the county that submitted the

application.

§ 222.1071. County Energy Transportation Reinvestment Zones

(a) A county shall determine the amount of the tax increment for a county

energy transportation reinvestment zone in the same manner the county

would determine the tax increment as provided in Section 222.107(a) for a

county transportation reinvestment zone.

(b) A county, after determining that an area is affected because of oil and gas

exploration and production activities and would benefit from funding under

Chapter 256, by order or resolution of the commissioners court:

(1) may designate a contiguous geographic area in the jurisdiction of the

county to be a county energy transportation reinvestment zone to

promote one or more transportation infrastructure projects, as that

term is defined by Section 256.101, located in the zone; and

(2) may jointly administer a county energy transportation reinvestment

zone with a contiguous county energy transportation reinvestment

zone formed by another county.

(1) dedicate or pledge all of the captured appraised value of real property

located in the county energy transportation reinvestment zone to

transportation infrastructure projects; and

(2) comply with all applicable laws in the application of this chapter.

(d) Not later than the 30th day before the date a commissioners court proposes

to designate an area as a county energy transportation reinvestment zone

under this section, the commissioners court must hold a public hearing on

the creation of the zone and its benefits to the county and to property in the

proposed zone. At the hearing an interested person may speak for or against

the designation of the zone, its boundaries, the joint administration of a zone

in another county, or the use of tax increment paid into the tax increment

account.

(e) Not later than the seventh day before the date of the hearing, notice of the

hearing and the intent to create a zone must be published in a newspaper

having general circulation in the county.

(f) The order or resolution designating an area as a county energy transportation

reinvestment zone must:

(1) describe the boundaries of the zone with sufficient definiteness to

identify with ordinary and reasonable certainty the territory included

in the zone;

(2) provide that the zone takes effect immediately on adoption of the

order or resolution designating an area and that the base year shall be

the year of passage of the order or resolution designating an area or

some year in the future;

(3) establish an ad valorem tax increment account for the zone or provide

for the establishment of a joint ad valorem tax increment account, if

applicable; and

(4) if two or more counties are designating a zone for the same

transportation infrastructure project or projects, include a finding that:

(A) the project or projects will benefit the property and residents

located in the zone;

(B) the creation of the zone will serve a public purpose of the

county; and

county is responsible.

(g) Compliance with the requirements of this section constitutes designation of

an area as a county energy transportation reinvestment zone without further

hearings or other procedural requirements.

(h) The county may, from taxes collected on property in a zone, pay into a tax

increment account for the zone or zones an amount equal to the tax

increment produced by the county less any amounts allocated under

previous agreements, including agreements under Section 381.004 Local

Government Code, or Chapter 312, Tax Code.

(i) The county may:

(1) use money in the tax increment account to provide:

(A) matching funds under Section 256.105; and

(B) funding for one or more transportation infrastructure projects

located in the zone;

(2) apply for grants under Subchapter C, Chapter 256, subject to Section

222.1072;

(3) use five percent of any grant distributed to the county under

Subchapter C, Chapter 256, for the administration of a county energy

transportation reinvestment zone, not to exceed $250,000;

(4) enter into an agreement to provide for the joint administration of

county energy transportation reinvestment zones if the commissioners

court of the county has designated a county energy transportation

reinvestment zone under this section for the same transportation

infrastructure project or projects as another county commissioners

court; and

(5) pledge money in the tax increment account to a road utility district

formed as provided by Subsection (n).

(j) Tax increment paid into a tax increment account may not be pledged as

security for bonded indebtedness.

(k) A county energy transportation reinvestment zone terminates on December

31 of the 10th year after the year the zone was designated unless extended by

an act of the county commissioners court that designated the zone. The

extension may not exceed five years. On termination of the zone, any money

remaining in the tax increment account must be transferred to the road and

bridge fund described by Chapter 256 for the county that deposited the

money into the tax increment account.

(l) The captured appraised value of real property located in a county energy

transportation reinvestment zone shall be treated as provided by Section

26.03 Tax Code.

(m) The commissioners court of a county may enter into an agreement with the

department to designate a county energy transportation reinvestment zone

under this section for a specified transportation infrastructure project

involving a state highway located in the proposed zone.

(n) In the alternative, to assist the county in developing a transportation

infrastructure project, if authorized by the commission under Chapter 441, a

road utility district may be formed under that chapter that has the same

boundaries as a county energy transportation reinvestment zone created

under this section. The road utility district may issue bonds to pay all or part

of the cost of a transportation infrastructure project and may pledge and

assign all or a specified amount of money in the tax increment account to

secure those bonds if the county:

(1) collects a tax increment; and

(2) pledges all or a specified amount of the tax increment to the road

utility district.

(o) A road utility district formed as provided by Subsection (n) may enter into an

agreement to fund development of a transportation infrastructure project or

to repay funds owed to the department. Any amount paid for this purpose is

considered to be an operating expense of the district. Any taxes collected by

the district that are not paid for this purpose may be used for any district

purpose.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.