Collin Central Appraisal District v. Garland Housing Finance Corporation and TX Collin Apartments, L.P. ( 2021 )

Affirmed and Opinion Filed February 22, 2021
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-19-01417-CV
COLLIN CENTRAL APPRAISAL DISTRICT, Appellant
V.
GARLAND HOUSING FINANCE CORPORATION AND TX COLLIN
APARTMENTS, L.P., Appellees
On Appeal from the 471st Judicial District Court
Collin County, Texas
Trial Court Cause No. 471-03704-2019
MEMORANDUM OPINION
Before Justices Schenck, Osborne, and Partida-Kipness
Opinion by Justice Partida-Kipness
Collin Central Appraisal District (CCAD) appeals the trial court’s judgment
for the Garland Housing Finance Corporation (GHFC) and TX Collin Apartments,
L.P (TX Collin) on their declaratory judgment action regarding CCAD’s denial of
an ad valorem tax exemption on a real property owned by GHFC and TX Collin. In
one issue, CCAD contends the trial court erred in granting GHFC and TX Collin’s
motion for summary judgment and denying CCAD’s motion for summary judgment.
We affirm the trial court’s judgment.
BACKGROUND
GHFC owns a tract of land in Plano, Texas, on which the Savannah at
Gateway Senior Living apartment complex is located (the Property). TX Collin has
a ground lease with GHFC and owns the improvements on the Property. TX Collin
is a limited partnership whose general partner is wholly owned by a subsidiary of
GHFC. The project to build the apartments, originally named Villas Gateway Senior
Housing, began in 2014.
On August 11, 2014, the Plano City Council passed a resolution (2014
Resolution) in support of “an application for four percent housing tax credit (HTC)
financing to the Texas Department of Housing and Community Affairs . . . .” The
resolution specifically recited:
 TX Collin Apartments L.P. will submit an application to the Texas
Department of Housing and Community Affairs (TDHCA) for 2014-
2015, noncompetitive, four percent Housing Tax Credits and to Collin
County Housing Finance Corporation or another qualified issuer for the
issuance of tax exempt bonds for Villas Gateway Senior Housing,
Hillary Acres Addition, Block A, Lot 2.
 Plano Housing Corporation will benefit from the development, thereby
allowing the organization to assist more Plano residents.
 [T]he City of Plano Housing Infill program encourages the
development of real property for low and moderate income housing.
 [T]he 2010-2014 Consolidated Plan of Housing and Community
Development Needs notes that low income renters within the city of
Plano have unmet housing needs, mostly related to affordability.
 [I]t is in the public interest of the citizens of the City of Plano that
application be made for such funding.
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Collin County Housing Finance Corporation (CCHFC) submitted its $20
million tax-exempt bond to the Texas Attorney General for approval. The Texas
AG approved the bond on December 3, 2014, finding it had “been issued in
accordance with law.” With financing provided by CCHFC through a tax-exempt
bond, TX Collin constructed the apartment complex. CCAD carried the Property on
its tax rolls as exempt from ad valorem taxes.
On October 30, 2017, TX Collin refinanced the original bond issued for
construction, and GHFC purchased the land on which the newly renamed apartment
complex is located. TX Collin and GHFC entered into a ground lease. CCAD
canceled the tax exemption on the Property from this point forward.
GHFC and TX Collin protested CCAD’s exemption cancellation and
valuation of the Property. The Collin Appraisal Review Board heard and denied the
protests. GHFC and TX Collin then filed the instant declaratory judgment action,
seeking review of CCAD’s denial of the tax exemption and property valuation.
CCAD answered, and GHFC and TX Collin moved for summary judgment, arguing
GHFC and all its property are exempt from taxes under chapter 394 of the local
government code. GHFC and TX Collin supported their motion with the following
evidence:
 The affidavit of GHFC’s Executive Director;
 The 2014 Resolution;
 The Texas AG’s bond-approval correspondence;
 The ground lease;
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 CCHFC’s 2014 resolutions approving bond issuance for acquisition
and construction of the Villas at Plano Gateway Senior Living
apartment complex;
 CCHFC’s and TX Collin’s loan agreement and related trust indenture
and regulatory agreement and declaration of restrictive covenants;
 CCHFC’s articles of incorporation, bylaws, financing application
procedures, and local regulations; and
 GHFC’s articles of incorporation, bylaws, amended and restated
bylaws, financing application procedures, and local regulations.
CCAD responded with the following evidence:
 Collin Appraisal Review Board’s notice and determination of GHFC
and TX Collin’s protests;
 The 2014 Resolution; and
 A letter from the Plano city attorney stating that the Plano City Council
did not authorize an ad valorem tax exemption by its 2014 Resolution
but merely voiced support for the use of tax-exempt bonds for the
housing project.
GHFC and TX Collin objected to the Plano city attorney’s letter on the grounds that
it was unsworn, hearsay, conclusory, lacked personal knowledge, and improperly
offered an opinion of law. The trial court sustained GHFC and TX Collin’s
objections.1
CCAD filed a competing traditional motion for summary judgment, arguing
that GHFC’s tax exemption was limited by section 394.005. According to CCAD,
section 394.005 required evidence that the City of Plano had “approve[d] the
application of Chapter 394 to the [P]roperty” for it to be exempt from ad valorem
taxes, and Plano had given no such approval. CCAD offered the same evidence in
1
CCAD does not contest the trial court’s evidentiary conclusion on appeal.
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support of its motion as it did in support of its response to GHFC and TX Collin’s
motion. The trial court denied CCAD’s motion for summary judgment and granted
GHFC and TX Collin’s motion for summary judgment. This appeal followed.
STANDARD OF REVIEW
In one issue, CCAD contends the trial court erred in granting GHFC and TX
Collin’s motion for summary judgment and denying CCAD’s motion. We review a
trial court’s summary judgment rulings de novo. KMS Retail Rowlett, LP v. City of
Rowlett, 559 S.W.3d 192, 197 (Tex. App.—Dallas 2017) (mem. op.), aff’d, 593
S.W.3d 175 (Tex. 2019). When both sides move for summary judgment and the trial
court grants one side’s motion and denies the other’s, we can consider both motions,
review the summary judgment evidence presented by both sides, determine all
questions presented, and render the judgment the trial court should have rendered.
Id. Here, the parties on both sides moved for summary judgment on traditional
grounds, thus each party bore the burden of establishing that there are no issues of
material fact and it was entitled to judgment as a matter of law. See id.The parties’ dispute revolves around the interpretation of certain provisions
of chapter 394 of the local government code. Statutory construction is a question of
law that we review de novo. Sw. Royalties, Inc. v. Hegar, 500 S.W.3d 400, 404
(Tex. 2016). Our primary objective is to give effect to the legislature’s intent, which
we ascertain from the plain meaning of the words used in the statute, if possible. Id.Tax exemptions, such as the one at issue here, are narrowly construed, and the
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taxpayer has the burden to “clearly show” that an exemption applies. Id.; TEX. TAX
CODE § 151.318(r). “Although statutory tax exemptions are narrowly construed,
construing them narrowly does not mean disregarding the words used by the
Legislature.” Sw. Royalties, Inc., 500 S.W.3d at 404.
ANALYSIS
CCAD contends in its sole issue that the trial court erred in granting GHFC
and TX Collin’s motion for summary judgment because GHFC and TX Collin failed
to “clearly show” that the Property was exempt from ad valorem taxes. According
to CCAD, section 394.005 of the local government code required GHFC to show
that Plano had approved the application of chapter 394 to the Property for it to
qualify for a tax exemption. This presents an issue of statutory construction. Thus,
our analysis of CCAD’s issue is controlled by the Code Construction Act. TEX. LOC.
GOV’T CODE § 1.002 (“The Code Construction Act (Chapter 311 of the Government
Code) applies to the construction of each provision in this code except as otherwise
expressly provided by this code.”).
GHFC is a housing finance corporation (HFC) formed under the Texas
Housing Finance Corporations Act (THFCA). See TEX. LOC. GOV’T CODE §§
394.001–.907. The legislature passed the THFCA to promote the benefits of
“residential ownership and development.” Id. § 394.002(b). Thus, “the purpose of
[the THFCA] is to provide a means to finance the cost of residential ownership and
development that will provide decent, safe, and sanitary housing at affordable prices
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for residents of local governments.” Id. § 394.002(a). The THFCA accomplishes
its purpose by “authoriz[ing] local governments to create and use public nonprofit
corporations to issue obligations . . . .” Id. § 394.002(d). These “public nonprofit
corporations” (HFCs) operate as “public instrumentalit[ies]” that perform “essential
governmental function[s] on behalf of and for the benefit of the general public, the
local government, and this state.” Id. § 394.002(c)(3). Accordingly, the legislature
declared:
The housing finance corporation, all property owned by it, the income
from the property, all bonds issued by it, the income from the bonds,
and the transfer of the bonds are exempt, as public property used for
public purposes, from license fees, recording fees, and all other taxes
imposed by this state or any political subdivision of this state.
Id. § 394.905; see also Harris Cty. Appraisal Dist. v. Se. Tex. Hous. Fin. Corp., 991
S.W.2d 18, 22 (Tex. App.—Amarillo 1998, no pet.) (holding the legislature enacted
section 394.905 within its constitutional power “‘[to] exempt from taxation public
property used for public purposes . . . .’ TEX. CONST. art VIII § 2 (emphasis
added)”).
The parties disagree on the scope of this exemption. According to GHFC and
TX Collin, the exemption is absolute. CCAD contends, however, that the exemption
is limited by section 394.005, which states:
This chapter does not apply to property located within a municipality
with more than 20,000 inhabitants as determined by the housing finance
corporation’s rules, resolutions relating to the issuance of bonds, or
financing documents relating to the issuance of bonds, unless the
governing body of the municipality approves the application of the
chapter to that property.
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TEX. LOC. GOV’T CODE § 394.005. CCAD argues that section 394.005’s strict
command that “[t]his chapter does not apply” necessarily means that no section of
chapter 394 applies to the Property because the Property is located in Plano, a
municipality with more than 20,000 inhabitants, and Plano did not “approve[] the
application of Chapter 394 to the Property.”2
To reach this conclusion, CCAD argues we must disregard section 394.005’s
reference to “the housing finance corporation’s rules, resolutions relating to the
issuance of bonds, or financing documents relating to the issuance of bonds” and,
instead, read the provision as prohibiting the application of chapter 394 in its entirety
when the property is located within a municipality with more than 20,000 inhabitants
absent approval from the municipality that chapter 394 applies to the property.3
CCAD maintains that to rule otherwise would result in the absurd scenario in which
an HFC could determine through its rules, resolutions, and financing documents
whether a municipality such as Plano has more than 20,000 inhabitants. Thus,
CCAD proposes reading the provision so that “the thing to be ‘determined’ is the
location of the Property, not the population of the municipality in which the Property
2
Despite this broad contention, we note the record reflects that CCAD recognized the Property’s tax
exemption from 2014, when CCHFC financed the development, until 2017, when GHFC acquired the land.
CCAD does not explain this apparent inconsistency or why the Property’s tax-exempt status changed.
3
The statute does not indicate what constitutes approval, and CCAD has failed to provide the Court
with any meaningful direction as to what evidence is required to meet its proposed approval standard.
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is located.” But neither CCAD’s proposed interpretation nor its analysis properly
construes the statute’s plain language.
When interpreting a statute, “[w]ords and phrases shall be read in context and
construed according to the rules of grammar and common usage.” TEX. GOV’T CODE
§ 311.011(a). We must presume that “the entire statute is intended to be effective.”
TEX. GOV’T CODE § 311.021(2). Thus, “[a]s a general principle, we eschew
constructions of a statute that render any statutory language meaningless or
superfluous.” City of Dallas v. TCI W. End, Inc., 463 S.W.3d 53, 57 (Tex. 2015);
see also Phillips v. Bramlett, 288 S.W.3d 876, 880 (Tex. 2009) (“We . . . try to give
effect to all the words of a statute, treating none of its language as surplusage when
reasonably possible.”).
Section 394.005 is comprised of two phrases joined by the conjunction
“unless.” The first phrase is at the center of the parties’ disagreement:
This chapter does not apply to property located within a municipality
with more than 20,000 inhabitants as determined by the housing finance
corporation’s rules, resolutions relating to the issuance of bonds, or
financing documents relating to the issuance of bonds, . . .
This phrase consists of a broad clause followed by a restrictive clause that begins
with “as determined by.” BRYAN A. GARNER, THE REDBOOK: A MANUAL ON LEGAL
STYLE §§ 1.6(a), 10.20 (2d ed. 2006). “[W]here there is a broad and restrictive
clause within a statute, the broad clause is limited or controlled by the restrictive
one.” Hammond v. City of Dallas, 712 S.W.2d 496, 498 (Tex. 1986) (citing City of
Baytown v. Angel, 469 S.W.2d 923, 924 (Tex. Civ. App.—Houston [14th Dist.]
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1971, writ ref’d n.r.e.), and City of West Lake Hills v. Westwood Legal Defense Fund,
598 S.W.2d 681, 686 (Tex. Civ. App.—Waco 1980, no writ)). The broad mandate
that “[t]his chapter does not apply property located within a municipality with more
than 20,000 inhabitants” is, therefore, restricted by the clause “as determined by the
housing finance corporation’s rules, resolutions relating to the issuance of bonds, or
financing documents relating to the issuance of bonds.” See id.Applying the rules of construction, we reject CCAD’s suggestion that we may
disregard the restrictive clause when applying the statute. See Phillips, 288 S.W.3d
at 880. Further, we reject CCAD’s claim that the restrictive clause refers to the
HFC’s documents only to determine whether the property is located in a
municipality of more than 20,000 inhabitants. On the contrary, a plain reading of
the entire first phrase leads to only one conclusion; that the HFC’s documents
determine whether chapter 394 applies to the property located in such a municipality.
See Hammond, 712 S.W.2d at 498. In other words, if the HFC’s rules, resolutions
relating to the issuance of bonds, or financing documents relating to the issuance of
bonds indicate that chapter 394 does not apply to a property located in a municipality
of more than 20,000 inhabitants, then the chapter does not apply to the property
“unless the governing body of the municipality approves the application of the
chapter to that property.”
Here, we need not address CCAD’s contention that the 2014 Resolution did
not constitute approval of the application of the chapter to the Property because the
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record reflects that GHFC’s rules, resolutions, and financing documents do not
indicate that chapter 394 would not apply to the Property. CCHFC’s local
regulations state that CCHFC was formed “for the public purpose of providing
financing for the cost of residential ownership and development within [Collin]
County that will provide decent, safe, and sanitary housing for persons of low and
moderate income at prices they can afford.” Consistent with this purpose, CCHFC’s
rules state that CCHFC will accept financing applications for multifamily housing
projects located only in Collin County, and it will only accept an application for a
“multifamily housing project in a city where the Mayor of that city requests the
financing in writing.”
Similarly, GHFC’s Amended and Restated Bylaws state that GHFC was
formed to accomplish the “public purposes of, and on behalf of, the City of Garland
(the ‘Unit’) (or a contiguous political subdivision or a contiguous county if
acceptable to the Board of Directors of the Corporation), by financing the cost of
residential ownership and development that will provide decent, safe and sanitary
housing for residents of the Unit at prices they can afford.” Although GHFC was
formed to accomplish purposes similar to those for which CCHFC was formed,
GHFC’s local regulations do not require a similar approval of or request for
financing, nor do they indicate that chapter 394 does not apply to property located
in a municipality of more than 20,000 inhabitants. Indeed, GHFC’s “rules,
resolutions relating to the issuance of bonds, or financing documents relating to the
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issuance of bonds” reflected in the record do not demonstrate that chapter 394 is not
applicable to the Property, or that Plano’s approval was required for chapter 394 to
so apply. As such, the summary judgment evidence conclusively established
GHFC’s right to the tax exemption. Accordingly, we overrule CCAD’s sole
appellate issue.
CONCLUSION
CCAD contends the Property is not exempt from ad valorem taxes under
section 394.905 because the City of Plano did not approve the application of the
chapter to the Property, as required by section 394.005. Having concluded there is
no evidence Plano’s approval was required under section 394.005, we overrule
CCAD’s sole issue. Accordingly, we affirm the trial court’s judgment.
/Robbie Partida-Kipness/
ROBBIE PARTIDA-KIPNESS
JUSTICE
191417F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
COLLIN CENTRAL APPRAISAL On Appeal from the 471st Judicial
DISTRICT, Appellant District Court, Collin County, Texas
Trial Court Cause No. 471-03704-
No. 05-19-01417-CV V. 2019.
Opinion delivered by Justice Partida-
GARLAND HOUSING FINANCE Kipness. Justices Schenck and
CORPORATION AND TX COLLIN Osborne participating.
APARTMENTS, L.P., Appellees
In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.
It is ORDERED that appellee GARLAND HOUSING FINANCE
CORPORATION AND TX COLLIN APARTMENTS, L.P. recover their costs of
this appeal from appellant COLLIN CENTRAL APPRAISAL DISTRICT.
Judgment entered this 22nd day of February, 2021.
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