Pleasanton Housing Finance Corporation and the Board Members of the Pleasanton Housing Finance Corporation, in Their Official Capacities v. City of Missouri City, Texas & Sienna Parks & Levee Improvement District
15-25-00113-CV
Tex. App.Jul 3, 2025Background:
- Chapter 394 authorizes local housing finance corporations (HFCs) to facilitate affordable residential development and grants HFC-owned qualifying property an ad valorem tax exemption.
- Several out-of-sponsor (“traveling”) HFCs—notably Pleasanton HFC—have acquired existing multifamily developments far outside their sponsoring municipality and sought full tax exemptions, generating substantial fees and alleged revenue transfers to sponsoring cities.
- Multiple Texas municipalities, appraisal districts, and special districts filed declaratory-judgment and ultra vires claims and sought temporary injunctions to stop purchases and the grant of tax exemptions for properties located outside the sponsoring HFCs’ local boundaries. Trial courts have issued temporary injunctions in some matters enjoining purchases and exemptions pending resolution.
- Appellants (HFCs) contend Chapter 394, as written before recent amendments, allowed HFCs broader geographic operation and argue appellate jurisdiction lies in the Fifteenth Court of Appeals under Gov’t Code §22.220(d). Plaintiffs (cities/districts) argue the statute limits HFC activity to the sponsoring local government and that suits are properly in district court.
- The Legislature enacted H.B.21 (effective May 28, 2025), which narrows geographic authority and adds compliance, reporting, and audit conditions for multifamily exemptions; some provisions apply prospectively and some impose deadlines for existing projects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Geographic scope of HFC authority under Chapter 394 (may an HFC acquire/own residential developments outside its sponsoring local government?) | HFC authority is limited to the local government that created/sponsors it; §394.903 requires the residential development be located “within the local government.” | HFCs may operate outside sponsor boundaries under the Act as previously written; HFCs serve a statewide public purpose and can delegate functions to state agency (TDHCA). | Trial courts issued temporary injunctions preventing out-of-jurisdiction acquisitions and tax exemptions; the ultimate statutory interpretation is contested on appeal. |
| Proper appellate jurisdiction (whether Fifteenth Court of Appeals has exclusive intermediate jurisdiction) | Plaintiffs: these are suits between political subdivisions/local governments and private entities; jurisdiction lies in regular appellate path. | Appellants: appeals are brought by/against state agencies or implicate statewide interests (Gov’t Code §22.220(d)); Fifteenth Court should have exclusive jurisdiction. | Jurisdictional assignment is contested in filings; appellants filed a jurisdictional letter asserting Fifteenth Court jurisdiction; the court’s definitive allocation remains pending. |
| Immunity and administrative-exhaustion for appraisal districts (may taxing units sue appraisal district directly?) | Cities: Tex. Tax Code §43.01 authorizes taxing units to sue appraisal districts to compel compliance (waiving immunity for this context); plaintiffs need not exhaust property-owner administrative remedies because this is a statutory/UDJA challenge. | TAD: asserts governmental immunity and urges administrative exhaustion/Tax Code remedies as exclusive. | Plaintiffs argue Section 43.01 waives immunity and that the dispute is not limited to appraisal-board appeals; trial-court rulings vary and jurisdictional pleas have been resisted—final rulings pending. |
| Constitutional challenge: extra‑jurisdictional taxation (Art. VIII limits) | Plaintiffs: if HFCs could remove property from other counties’ tax rolls, that would violate Texas Constitution limits on counties’ ad valorem taxing authority. | HFCs: contend their statutory authority (as interpreted) is lawful and constitutional or rely on legislative framework. | Plaintiffs have pleaded constitutional claims and seek attorney‑general notice; courts so far are addressing injunctive relief first; constitutional merits remain unresolved. |
Key Cases Cited
- Monsanto Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937 (Tex. 1993) (distinguishing political subdivisions’ geographically limited jurisdiction from state agencies’ statewide reach).
- Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (elements and standard for obtaining a temporary injunction).
- In re Dallas Cnty., 697 S.W.3d 142 (Tex. 2024) (discussing the Fifteenth Court’s role in statewide-significance matters and allocation of appellate jurisdiction).
- Kelley v. Homminga, 706 S.W.3d 829 (Tex. 2025) (further defining cases implicating state interests and jurisdictional considerations for the Fifteenth Court).
- Hegar v. Health Care Serv. Corp., 652 S.W.3d 39 (Tex. 2022) (statutory interpretation principles; enforce plain meaning in context).
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires doctrine and prospective equitable relief against public officials acting without authority).
- Walker v. U.S. Dep’t of Housing & Urban Dev., 326 F. Supp. 2d 773 (N.D. Tex. 2004) (construing §394.903 to limit residential development to the housing authority’s jurisdiction as proxy).
- Ashland Inc. v. Harris Cnty. Appraisal Dist., 437 S.W.3d 50 (Tex. App.—Houston [14th Dist.] 2014) (statutory waiver and plain-language interpretation of taxing statutes).