NO. 04-14-00343-CV 

## IN THE **FOURTH COURT OF APPEALS** 

## San Antonio, Texas

____________________ _______________ EXLP LEASING, LLC and EES LESING, LLC, Appellants

v. WEBB COUNTY APPRAISAL DISTRICT and UNITED INDEPENDENT SCHOOL DISTRICT Appellees

______________________ ________________ From the 406 th

Judicial District , Webb County Texas Trial Court No. 2013-CV-8000074-D4 The Hon. Oscar J. Hale, Jr., Judge Presiding

________________________ ______________________ ____________________ UNITED INDEPENDENT SCHOOL DISTRICT’S MOTION FOR REHEARING

________________________ ______________________ ____________________ Alberto Alarcon State Bar No. 00968425 Paul C. Saenz State Bar No. 24013441 Guillermo G. Alarcon State Bar No. 00968410 ALARCON & SAENZ, PLLC 1302 Washington Laredo, Texas 78040 Tel. (956) 727 8585 Fax. (956)727 8597 Email: aalarcon@sbcglobal.net

ATTORNEYS FOR THE UNITED INDEPENDENT SCHO OL DISTRICT ACCEPTED 14-00343 FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 6/12/2015 4:28:22 PM KEITH HOTTLE CLERKi TABLE OF CONTENTS

Index of Authoritie s................................................ ...........................ii Points Relied Upon Re hearing........................... ....................................iii Argument.................................... ...................................................1

I. Under the doctrine of the “last anteceden t”, the phrase “not in dispute” refers to value, the last and nearest anteceden t, and not to the more remote phrase “the amount of taxes due”.........................................................1

II. Applying the phrase “not in dispute” to “the amount of taxes due” renders the phrase “taxable value” mean ingless and superfluous........................2

III. Under the Court’s ruling, taxpayers will be able to extend the delinquency date, avoiding interest and penalties, without paying anything, simply by adding a situs dispute to their protest an d appeal, regardless of merit; this is in direct contravention of th e Legislature’s policy...............................2 Conclusion and Pray er............................................. ............................4

Certificate of Serv ice...........................................................................6 Certificate of Comp liance..................... ................................................7ii INDEX OF AUTHORITIES

Cases

Christus Health Gulf Coast v. Aetna, Inc. , 397 S.W.3d 651 (Tex. 2013)......... Columbia Med. Ctr. of La s Colinas, Inc. v. Hogue , 271 S.W.3d 238 (Tex. 2008)... Entergy Gulf States, Inc. v. Summers , 282 S.W.3d 433 (Tex. 2009)................

In re Ford Motor Co. , 442 S.W.3d 265 (Tex. 2014)............................... Palaniappan v. Harris Cnty. Appraisal Dist. , No. 01-11-00344-CV, 2013 WL 6857983 (Tex. App.-Houston [1 st Dist.] Dec. 31, 2013, no pet.) (not designated by publ ication)....................................................... Texas W. Oaks Hosp., LP v. Williams , 371 S.W.3d 171 (Tex. 2012)........... Valerus Compression Services v. Gregg County Appraisal Dist., 457 S.W.3d 520 (Tex. App.-Tyler 2015, no pet.).................................................. .........4

.........2

.........1

.........2

.........3

.........1

......iv, 4

Statutes and Rules

Tex. Tax Code Ann. § 1.04 (10) (West, Westlawnext through 2015 Sess.)... Tex. Tax Code Ann. § 23.1241 (West, Westlawnext through 2015 Sess.)..... Tex. Tax Code Ann. § 41.4115 (b), 41A.10 (a), 42.08 (a) (West, Westlawnext through 2015 Sess.)............

.................................... Tex. Tax Code Ann. § 41.42 (West, Westlawnext through 2015 Sess.).......... Tex. Tax Code Ann. § 42.08 (a) (Wes t, Westlawnext through 2015 Sess.)... Tex. Tax Code Ann. § 42.08 (b) (1) (West, Westlawnext through 2015 Sess.)..............................

................................................. Tex. Tax Code Ann. § 42.08 (d) (W est, Westlawnext through 2015 Sess.)... Tex. R. App. P. 49.1............................................................... .........1 ......iv, 4

.........2

.........iv

......3, 4

...iii, v, 1

.........3

.........iiiiii POINTS RELIED UPON REHEARING

Pursuant to Rule 49.1 of the Texas Ru les of Appellate Procedure, Appellee, United Independent School District (“UISD”) , relies on the followin g points in filing this motion for rehearing: Section 42.08 (b) (1) of the Texas Tax Code requires a payment in order to prevent the forfeiture of judicial review. Th e actual text states that the payment must be in “the amount of the taxes due on the portion of the taxable value of the property that

is not in dispute ” (emphasis added). In its decision, the Court misinterpreted section 42.08 (b) (1) by failing to apply the phrase “ not in dispute” to the phrase’s nearest and last antecedent referent, “taxable value of the property”. Instead, the Court applied the phrase “not in dispute” to the more remote phrase “the amount of taxes due”, stating that “the owner must pay the lesser of: (1) the amount of taxes not in dispute....” Op. at 5. If the Court had applied the phrase “not in dispute” to its last and nearest referent, the Court would have had to apply the meaning given by the Legislature to the phrase “taxable value”. “Taxable value” only me ans value; not value that an entity has jurisdiction to tax. By failing to do so , the Court revised the statute and created an exception of $-0- prepayment requirement in situs disputes, an exception which is

nowhere to be found in section 42.08. Moreover, if the phrase “amount of taxes du e” was intended as a referent of the phrase “not in dispute”, the Legislature would not have had to include the phrase “taxable value of the property”. Necessarily, if the “taxable value” is in dispute so theniv would be the “amount of taxes due”, makin g the phrase “taxable value” superfluous and meaningless. In other words, it would have been sufficient to for the statute to state exactly what the Court stated: “the amount of taxes not in dispute,” making the phrase “taxable value” totally superfluous and meaningless. Op. at 5 The Legislature’s policy is ea sily discernible from the text of Chapters 41, 41A and 42 of the Tax Code as a whole. The polic y is to prevent taxpayers from using the judicial review as a subterfuge for delaying or avoiding the payment of taxes and to assure that the activities of the local gove rnments which rely on ad valorem taxes are not unduly impeded during judi cial review. When the tax statutes were enacted, the Legislature was fully aware that there would be situs disputes. See Tex. Tax Code Ann. § 41.42 (West, Westlawnext through 2015 Sess.). But the Legislat ure chose to make no exception to the prepayment requirement in situs disputes when it could have easily done so. Whether section 42.08 ought to contain an exception to the prepayment requirement in situs cases is a po licy choice the Legislature has made. The Court’s decision paves the way for abus e of the use of judi cial review as a subterfuge for delaying or av oiding the payment of taxes in cases even where the situs is clearly within the jurisdiction of the ta xing district. This case is a prime example. Whether the property the subject of this case is dealer’s heavy equipment inventory or not has nothing to do with the clear situs of the equipment. In its decision, the Court

did not address Valerus Compression Services v. Gregg County Appraisal Dist., 457 S.W.3d 520 (Tex. App.-Tyler 2015, no pet.), which held that section 23.1241 (section dealing withv dealer’s heavy equipment invent ory) has nothing to do with situs. The Court’s ruling gives taxpayers an exception to the prepayment requirement not contained in section 42.08, so long as situs is in dispute. Theref ore, any taxpayer may now include a claim of improper situs in their protest, even if the cl aim lacks merit, and th en appeal an adverse ruling and the prepayment requirement would be $-0-. More gravely, the exception created by the Court gives the taxpayer th e ability to extend the delinquency date, without paying a dime or incurring penalties or interest, for as long as the taxpayer can keep the case in court. This case was filed in 2013 for taxes that would have become delinquent in February 1, 2013, and there is still no delinquency date. It is obvious why the Legislature decided not to create an ex ception of $-0- prepayment requirement in situs disputes. If such an exception is read into section 42.08, every protest and appeal will undoubtedly contain a situs dispute, regardless of merit.1 ARGUMENT

I. Under the doctrine of the “last ant ecedent”, the phrase “not in dispute” refers to value, the last and nearest antecedent, and not to the more remote phrase “the amount of taxes due” Section 42.08 (b) (1) does not provide for a payment of $-0- if the property owner claims the property is not sitused in the taxing jurisidiction, nor does it provide, as held by the Court, that “a taxpayer is required to pay only the lesser of the undisputed portion

of the taxes...” Op. at 6. Instead, the actual text of section 42.08 (b) (1) provides for a payment of “the amount of taxes due on the portion of the taxable value of the property that

is not in dispute .” Tex. Tax Code Ann. § 42.08 (b) (1) (West, Westlawnext through 2015 Sess.) Under the doctrine of the “last an tecedent,” relative and qualifying words, phrases, and clauses are to be applied to the words or phrases immediately preceding,

and are not to be construed as extendin g to or including ot hers more remote. Texas W. Oaks Hosp., LP v. Williams , 371 S.W.3d 171, 184 (Tex. 2012). Here, the phrase “not in dispute” refers to the “taxable value of th e property” and not to the more remote phrase “the amount of taxes due.” And, “taxable valu e” does not mean valu e that is subject to the taxing entity’s jurisdiction to tax; it simp ly means value. Tex. Tax Code Ann. § 1.04 (10) (West, Westlawnext through 2015 Sess.) (when the Legislature has supplied its own definition, as is the case here, the courts do not look at the ordinary or commonly understood meaning; the courts are bound by the definition supplied by the Legislature. Entergy Gulf States, Inc. v. Summers , 282 S.W.3d 433, 437 (Tex. 2009)).2 II. Applying the phrase “not in dispute” to “the amount of taxes due” renders the phrase “taxable value” meaningless and superfluous Moreover, applying the phrase “not in dispute” to the phrase “the amount of

taxes due” would not make sens e because it would render the phrase “taxable value of the property” meaningless and superfluou s, in violation of yet another cannon of statutory construction. The courts must not interpret a statute in a manner that renders any part of the statute meaningless or superfluous. Columbia Med. Ctr. of Las Colinas, Inc. v. Hogue , 271 S.W.3d 238, 256 (Tex. 2008). If the phrase “amount of taxes due” was intended as a referent of the phrase “not in dispute”, it would not have been necessary to include the phrase “taxable value of the pr operty” because if the “taxable value is in dispute” so then would be the “amount of taxes due”, making the phrase taxable value superfluous.

III. Under the Court’s ruling, taxpayers wi ll be able to extend the delinquency date, avoiding interest and penalties, without paying anything, simply by adding a situs dispute to their protest and appeal, regardless of merit; this is in direct contravention of the Legislature’s policy Also, in ascertaining the meaning of a stat ute, the courts must look, in addition to the particular statutory language, to the language and design of the statutory scheme

as a whole. In re Ford Motor Co. , 442 S.W.3d 265, 280 (Tex. 2014). There can be no doubt that the meaning of the statue is that the delinquency date is not affected by a protest or an appeal unless th e taxpayer pays taxes on the value not in dispute. Tex. Tax Code Ann. § 41.4115 (b), 41A.10 (a), 42.08 (a) (West, Westlawnext through 2015 Sess.)3 The Legislature’s policy is apparent from th e text-to prevent taxpayers from using the judicial review as a subterfuge for delaying or avoiding the payment of taxes and to assure that the activities of the local gove rnments which rely on ad valorem taxes are not unduly impeded duri ng judicial review. Palaniappan v. Harris Cnty. Appraisal Dist. , No. 01-11-00344-CV, 2013 WL 6857983, at *4 (Tex. App.-Houston [1 st Dist.] Dec. 31, 2013, no pet.) (not designated by publication) . Of course, an owner who is unable to pay the taxes while a protest or appeal is pending may be excused upon a showing of inability to pay, but that is not the case here. Tex. Tax Code An n. § 42.08 (d) (West, Westlawnext through 2015 Sess.) The owner of the property who protests and appeals is given the benefit of extending the delinque ncy date while the case is on appeal, so long as the owner pays pay taxes on the value not in dispute. Tex. Tax Code Ann. § 42.08 (a) (West, Westlawnext through 2015 Sess.). Now, under the Court’s ruling, owners will be able to pay $-0- by including a lack of situs claim, regardless of merit. The Legislature’s failure to make an excep tion of non-payment if the dispute is situs is evident. An exception of payment of taxes for value not in dispute is understandable because the owner is still required to make a payment. The Court’s ruling means that if situs is one of the issues, the owner has to pa y nothing while the case is on appeal. With or without merit, anyone can contest situs and avoid paying anything, without accruing penalties or interest, for as long as the owner can maintain the case in court. This subterfuge in cases where the situs is clearly wi thin the jurisdiction of the taxing district can be used by any property owner. In this case, for example, whether the property is4 dealer’s heavy equipment inventory or not has nothing to do with the clear situs of the equipment in Webb County. In Valerus Compression Services v. Gregg County Appraisal District, 457 S.W.3d at 524-527, the court held that section 23.1241 (the section dealing with heavy equipment inventory) is not a situs statue and it was never intended as such. The Webb County Appraisal District ha s already made a determination that the compressors are not dealer’s heavy equipment inventory and its value, a determination that entails substantial inspection of the equipment’s characteristics located in its jurisdiction. Obviously, the Legislature has made what it c onsiders a wise policy choice to prevent such kind of abuse by not allo wing taxpayers to pay nothing and be in compliance with the prepayment requirement of section 42.08. The Court should decline the taxpayers’ invitation to thwart the Legislature’s policy.

CONCLUSION AND PRAYER The Court must “take the Legislature at its word, respect its policy choices, and resist revising a statute under the guise of interpreting it”, even if liberally. Christus Health Gulf Coast v. Aetna, Inc. , 397 S.W.3d 651, 654 (Tex. 2013) . The words of the statute are not ambiguous. Its plain meaning does not provide an exception of $-0- prepayment requirement in cases involving allegations of improper situs. When the words of the statute are unambiguous and yield but one inte rpretation, the judge’s inquiry is at end.

Id. UISD, therefore, prays that the Court r econsider its opinion and judgment of June 3, 2015, and affirm the judgment of the trial court.5 Respectfully submitted, /s/ Alberto Alarcon Alberto Alarcon State Bar No. 00968425 Paul C. Saenz State Bar No. 24013441 Guillermo G. Alarcon State Bar No. 00968410 ALARCON & SAENZ, PLLC 1302 Washington Laredo, Texas 78040 Tel. (956) 727 8585 Fax. (956)727 8597 Email: aalarcon@sbcglobal.net

ATTORNEYS FOR THE UNITED INDEPENDENT SCHO OL DISTRICT6 CERTIFICATE OF SERVICE I certify that on June 12, 2015, a true and correct copy of United Independent School District’s Motion for Rehearing was serv ed via the States’ E-filing system upon the following counsel:

Evan A. Young 98 San Jacinto Blvd., Suite 1500 Austin, Texas 78701 Tel. (512) 322 2500 Fax. (512) 322 2501 Email: evan.young@bakerbotts.com

Paul R. Elliott Benjamin A. Geslison One Shell Plaza 910 Louisiana St. Houston, Texas 77002 Tel. (713) 229 1241 Fax. (713) 229 2841 Email: paul.elliott@bakerbotts.com Email: geslison@bakerbotts.com Dylan Wood Purdue, Brandon, Fielder, Collins & Mott L.L.P. 3301 Northland Drive, Suite 505 Austin, Texas 78731 Tel. (512) 302 0190 Fax. (512) 323 6963 Email: dwood@pbfcm.com /s/ Alberto Alarcon Alberto Alarcon7 CERTIFICATE OF COMPLIANCE As required by Texas Rule of Appellate Proced ure 9.4 (i) (3), I certify that this brief complies with the type-volume limitation of Texas Rule of Appellate Procedure 9.4 (i)(2)(B) and 9.4(i)(1). The Brief contains 1909 words. The undersig ned counsel certifies that he relied upon the word count of the computer program used to prepare the document. The undersigned counsel also certi fies that this brief complies with the typeface requirements of Texas Rule of Appella te Procedure 9.4(e). This brief has been prepared in a proportionally spaced typeface in fourteen (14) point “Garamond” style

font for text.

/s/ Alberto Alarcon Alberto Alarcon