      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                             444444444444444444444444444
                              ON MOTION FOR REHEARING
                             444444444444444444444444444



                                      NO. 03-06-00501-CV



       Edd Hendee, Individually and as Executive Director of C.L.O.U.T., Appellant

                                                v.

                  David Dewhurst, Tom Craddick, State of Texas, and the
                        Texas Legislative Budget Board, Appellees


    FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
     NO. D-1-GN-06-002156, HONORABLE WILLIAM E. BENDER, JUDGE PRESIDING



                                          OPINION


               We withdraw our opinion and judgment issued April 17, 2007, and substitute the

following in its place. The Court has overruled the State Defendants’ motions for rehearing and

en banc reconsideration.

               In response to the Texas Supreme Court’s decision in the Neeley v. West Orange Cove

case,1 the 79th Legislature, during its third called session of April and May 2006, enacted H.B. 1,




       1
          Neeley v. West Orange Cove-Consolidated Indep. Sch. Dist., 176 S.W.3d 746 (Tex. 2005).
The supreme court held that Texas’s public school finance system constituted an unconstitutional
state property tax and gave the legislature until June 1, 2006 to enact corrective legislation.
Id. at 800.
which the Governor signed into law on May 31 of that year. Among other things, H.B. 1 attempted

to shift some of the burden of funding Texas’s public schools from local property taxpayers to

the state and, to that end, made additional appropriations of $3.825 billion for the biennium ending

on August 31, 2007. In June 2006, Edd Hendee, individually and as executive director of the group

Citizens Lowering Our Unfair Taxes (C.L.O.U.T.) (collectively, Plaintiffs), filed suit against

the Lieutenant Governor, the Speaker of the House of Representatives, the Comptroller, and

the members of the Legislative Budget Board (LBB),2 all in their official capacities, and the State

of Texas, seeking declarations that H.B. 1 was unconstitutional and unlawful. Plaintiffs’ central

allegation is that the appropriation called for in H.B. 1 caused the Defendants to exceed the aggregate

biennial cap on the rate of growth of appropriations under article VIII, section 22 of the Texas

Constitution and chapter 316 of the government code. These provisions mandate that the “rate of

growth of appropriations from state tax revenues” not dedicated by the constitution not exceed the

“estimated rate of growth of the state’s economy.” Tex. Const. art. VIII, § 22(a); Tex. Gov’t Code

Ann. § 316.001 (West 2005). All defendants except the Comptroller (collectively, the “State

Defendants”) filed a plea to the jurisdiction. The district court granted the plea without specifying

its grounds, and dismissed Plaintiffs’ claims against the State Defendants for want of jurisdiction.


       2
          The LBB is a permanent joint committee of the Texas Legislature comprised of the
lieutenant governor, speaker of the house of representatives, the chairman of the senate finance
committee, the chairman of the house appropriations committee, the chairman of the house ways and
means committee, three members of the senate appointed by the lieutenant governor, and two
additional house members appointed by the speaker. Tex. Gov’t Code. Ann. § 322.001(a)
(West 2005). The lieutenant governor and speaker of the house are joint chairs of the LBB.
Id. § 322.001(b). The LBB develops budget and policy recommendations for legislative
appropriations, including a draft General Appropriations Act each session, id. § 322.008(c)
(West 2005), and fiscal impact statements regarding other proposed legislation. Id. § 314.001
(West 2005).

                                                  2
               Plaintiffs bring this interlocutory appeal from the district court’s order. See Tex. Civ.

Prac. & Rem. Code Ann. § 51.014(a)(8) (West Supp. 2006); Perry v. Del Rio, 53 S.W.3d 818, 820-

23 (Tex. App.—Austin 2001), pet. dism’d, 66 S.W.3d 239, 242 (Tex. 2001). We affirm the

district court’s order of dismissal in part, reverse in part, and remand for further

proceedings consistent with this opinion.


                                         BACKGROUND

Constitutional and statutory provisions

               Before turning to the jurisdictional issues presented by this appeal, it is helpful to

consider the constitutional and statutory context in which they arise.

               Article VIII, section 22(a) of the Texas Constitution provides:


       In no biennium shall the rate of growth of appropriations from state tax revenues not
       dedicated by this constitution exceed the estimated rate of growth of the state’s
       economy. The legislature shall provide by general law procedures to implement
       this subsection.


Tex. Const. art. VIII, § 22(a). An “appropriation” refers to a legislative enactment authorizing state

funds to be expended for particular purposes. The constitution elsewhere requires that “[n]o money

shall be drawn from the Treasury but in pursuance of specific appropriation made by law; nor shall

any appropriation of money be made for a longer term than two years.” See Tex. Const. art. VIII,

§ 6.3 “State tax revenues not dedicated by this constitution” refers to one source of funds that the


       3
          The parties appear to agree that the relevant “biennium” is the state’s fiscal
biennium, which runs from September 1 of each odd-numbered year through August 31 of the
succeeding odd-numbered year.

                                                  3
legislature could appropriate; others include non-tax revenues and tax revenues whose

use is dedicated by the constitution.

                 Subsection (b) of article VIII, section 22 authorizes the legislature to override the

appropriations limit otherwise imposed by subsection (a) by adopting a resolution, approved by a

record vote of each house, finding that an emergency exists and identifying the nature of that

emergency, in which case the legislature’s excess appropriation may not exceed the amount specified

in the resolution. Id. art. VIII, § 22(b). Further, these limits expressly do not alter, amend or repeal

the Texas Constitution’s “pay-as-you-go” or balanced budget limitation of article III, section 49a.

Id. art. VIII, § 22(c). The “pay-as-you-go” limitation generally requires that before any bill

containing an appropriation can be considered passed and be sent to the governor, the comptroller

must certify that each amount appropriated is within the amount of revenue estimated to be available

in the corresponding affected funds. Id. art. III, § 49a(b).4


       4
           Article III, section 49a provides in full:

           (a)   It shall be the duty of the Comptroller of Public Accounts in advance of each
                 Regular Session of the Legislature to prepare and submit to the Governor and
                 to the Legislature upon its convening a statement under oath showing fully
                 the financial condition of the State Treasury at the close of the last fiscal
                 period and an estimate of the probable receipts and disbursements for the then
                 current fiscal year. There shall also be contained in said statement an itemized
                 estimate of the anticipated revenue based on the laws then in effect that will
                 be received by and for the State from all sources showing the fund accounts
                 to be credited during the succeeding biennium and said statement shall
                 contain such other information as may be required by law. Supplemental
                 statements shall be submitted at any Special Session of the Legislature and
                 at such other times as may be necessary to show probable changes.

           (b)   Except in the case of emergency and imperative public necessity and with a
                 four-fifths vote of the total membership of each House, no appropriation in

                                                    4
                Article VIII, section 22 was born of a tax reform effort in the late 1970s.5 It was one

of several components of a “Tax Relief Amendment” to the constitution proposed earlier that year

by the 65th legislature during a special session called for that purpose by Governor Dolph Briscoe.

H.J.R. 1, 65th Leg., 2d C.S. It was apparently modeled on a Tennessee provision. See Janice C.

May, The Texas State Constitution: A Reference Guide 310 (1996). Article VIII, section 22 was

ratified by the voters in November 1978.

                As the second sentence of Article VIII, section 22(a) requires, the legislature enacted

laws to implement the provision. The legislature did so during the regular session beginning in

January 1979, immediately following article VIII, section 22’s ratification. See generally Acts 1979,

66th Leg., R.S., ch. 302. With some intervening amendments, these enactments are now codified

in chapter 316 of the government code. See id. art. 9, § 1.




                excess of the cash and anticipated revenue of the funds from which such
                appropriation is to be made shall be valid. No bill containing an
                appropriation shall be considered as passed or be sent to the Governor for
                consideration until and unless the Comptroller of Public Accounts endorses
                his certificate thereon showing that the amount appropriated is within the
                amount estimated to be available in the affected funds. When the Comptroller
                finds an appropriation bill exceeds the estimated revenue he shall endorse
                such finding thereon and return to the House in which same originated. Such
                information shall be immediately made known to both the House of
                Representatives and the Senate and the necessary steps shall be taken to bring
                such appropriation to within the revenue, either by providing additional
                revenue or reducing the appropriation.

Tex. Const. art. III, § 49a.
        5
         See John Greene & Larry Toomey, The Tax Reform Act of 1979, 42 Tex. B.J. 1007, 1007
(1979) (contemporaneously observing, with reference to the notable California taxpayer-relief
measures of the 1970s, that “Proposition 13 sentiment has invaded the Texas Legislature.”).

                                                  5
               Section 316.001, government code, tracks the mandate of article VIII, section 22(a):

“The rate of growth of appropriations in a biennium from state tax revenue not dedicated by the

constitution may not exceed the estimated rate of growth of the state’s economy.” Tex. Gov’t Code

Ann. § 316.001. Other provisions of chapter 316 address how “the estimated rate of growth of

the state’s economy” is calculated and provide mechanisms for ensuring that, as

article VIII, section 22(a) requires, the rate of growth in appropriations does not exceed the

estimated rate of growth of the state’s economy.         The LBB is charged with several key

responsibilities within this statutory scheme.

               Under section 316.002(b), the LBB is to determine both “the estimated rate of growth

of the state’s economy” and the rate of appropriations growth by comparing those figures from the

baseline of the current biennium to the next biennium. Id. § 316.002(b) (West 2005). It calculates

“the estimated rate of growth of the state’s economy” from the current biennium to the next

biennium by “dividing the estimated Texas total personal income for the next biennium by the

estimated Texas total personal income for the current biennium.” Id. § 316.002(a)(1), (b). “Using

standard statistical methods, the board shall make the estimate by projecting through the biennium

the estimated Texas total personal income reported by the United States Department of Commerce

or its successor in function.” Id. § 316.002(b). However, section 316.002(c) contemplates that “[i]f

a more comprehensive definition of the rate of growth of the state’s economy is developed and is

approved” by a committee of the governor, lieutenant governor, speaker of the house of

representatives, and comptroller, “the board may use that definition.” Id. §§ 316.002(c), 316.005




                                                 6
(West 2005). The State Defendants represent that such an alternative, “more comprehensive”

definition has never been adopted.

               Section 316.002 also requires the LBB to establish “the level of appropriations for

the current biennium from state tax revenues not dedicated by the constitution.” Id. § 316.002(a)(2).

This figure is itself partly an estimate, for reasons relating to the nature of appropriations.6

Even without additional legislative action, the amount of an appropriation, as well as its funding

source, may change during a biennium, such as when changes in economic conditions not originally

forecasted impact the amount or composition of funding sources subject to an appropriation.

Because the “level of appropriations for the current biennium from state tax revenues not dedicated

by the constitution” is calculated during the current biennium, it is comprised of both actual

appropriations of non-dedicated tax revenues (appropriated non-dedicated tax revenues that have

already been spent, and whose amount is thus finally ascertainable) and estimated appropriations of

non-dedicated tax revenues (the amount of such funds that the LBB anticipates will be spent

pursuant to appropriations during the remainder of the biennium). Reflecting the potential for

unforeseen changes in the amount or funding source of appropriations later in the biennium, the LBB

determines “the level of appropriations for the current biennium from state tax revenues not

dedicated by the constitution” “subject to adjustments resulting from revenue forecast revisions or

subsequent appropriations certified by the Comptroller.”7



       6
          We base the following observations regarding the nature of appropriations chiefly on
public documents Plaintiffs attached to their petition.
       7
          Notice of Meeting of the Legislative Budget Board, Agenda Item 3 (Nov. 17, 2004)
(C.R. 57, Ex. E to Plaintiff’s original petition).

                                                 7
                  The LBB applies the “rate of growth of the state’s economy” to the “the level of

appropriations for the current biennium from state tax revenues not dedicated by the constitution”

to yield the appropriations limit, or “spending cap”: “the amount of state tax revenues not dedicated

by the constitution that could be appropriated for the next biennium within the limit established by

the estimated rate of growth of the state’s economy.” Id. § 316.002(a)(3). Reflecting the potential

that the current-biennium appropriation baseline might change, the LBB’s spending cap calculation

is expressly made “subject to adjustments in [current] biennial appropriations.”8

                  The LBB is to “hold a public hearing” by December 1 of each even-numbered year

(i.e., those preceding a regular legislative session) “to solicit testimony regarding the proposed items

of information and the methodology used in making the calculations required by Section 316.002.”

Id. § 316.004 (West 2005). Before it approves the items of information required by section 316.002,

the LBB is required to publish in the Texas Register the proposed items of information and

“a description of the methodology and sources used in the calculations.” Id. § 316.003 (West 2005).

                  After the LBB approves the items of information required by section 316.002, it must

submit the information to the committee composed of the governor, lieutenant governor, speaker

of the house of representatives, and comptroller. Id. § 316.005(a). This committee has ten

days to adopt the items, with any amendments it might make.                Id. § 316.005(b).     If the

committee fails to act within the ten-day period, the items are deemed approved by the committee.

Id. § 316.005(c). The State Defendants represent that this committee “has never met to approve

these items,” so that “the items have historically been approved by the inaction of the committee.”


        8
            Id.

                                                   8
                “To ensure compliance with Article VIII, Section 22, of the Texas Constitution,” the

LBB is prohibited from transmitting “in any form” to the governor or legislature either the “budget

of estimated appropriations” or the general appropriations bill until “the limit on the rate of growth

of appropriations has been adopted as required by this subchapter.” Id. § 316.002(d). These events

are ordinarily required to occur not later than the fifth and seventh days, respectively, after a regular

session convenes. Id. § 322.008(c) & (d) (West 2005). “In the absence of an action by the [LBB]

to adopt a spending limit,” the estimated rate of growth of the state’s economy is deemed to be zero,

meaning that appropriations for the next biennium from non-dedicated tax revenues could not exceed

the amount of such appropriations in the current biennium. Id. § 316.002(e).9

                Additionally, section 316.006 provides that unless authorized by a majority vote of

the LBB members from each house, the LBB’s budget recommendations relating to the proposed

appropriations of state tax revenue not dedicated by the constitution may not exceed the limit on

estimated appropriations. Id. § 316.006 (West 2005). Moreover, section 316.008 provides that the

“proposed limit” on appropriations is “binding on the legislature with respect to all appropriations

for the next biennium made from state tax revenues not dedicated by the constitution” absent a

resolution to raise the cap under article VIII, section 22(b). Id. § 316.008(a) (West 2005). “The

rules of the house of representatives and senate shall provide for enforcement” of this limitation.




        9
          Subsections (d) and (e), added in 1991, apparently responded to an initial failure or refusal
of the LBB to comply with its statutory requirements to set a spending cap. C.R. 54; see Janice
C. May, The Texas State Constitution: A Reference Guide 310 (1996) (noting that twenty
legislators had sought mandamus with the Texas Supreme Court to compel the LBB to act).

                                                   9
Id. § 316.008(b). Both the house and senate rules in effect during the 79th Legislature’s third

called session, when H.B. 1 was enacted, contained virtually identical provisions that:


        Unless within the authority of a resolution or resolutions adopted pursuant to Article
        VIII, Section 22(b), of the Texas Constitution, it is not in order for the [chamber] to
        consider for final passage on third reading, on motion to concur in [the other
        chamber’s] amendments, or on motion to adopt a conference committee report, a bill
        appropriating funds from the state treasury in an amount that, when added to
        amounts previously appropriated by bills previously passed and sent or due to be
        sent to the comptroller, would exceed the limit on appropriations established under
        Chapter 316, Government Code.


Tex. H.R. Rule 8, § 21(f), Tex. H.R. 5, 79th Leg., R.S., 2005 H.J. of Tex. 108, 114; Tex. S. Rule

7.20, Tex. S. Res. 3, 80th Leg., R.S., 2007 S.J. of Tex. 24. In other words, a bill that members

believe would exceed the spending cap is subject to a point of order. If determined meritorious and

sustained by the chamber’s presiding officer, such a ruling would prevent passage of the bill until

the defect is remedied. See Tex. H.R. Rule 1, § 9, Tex. H.R. 3, 80th Leg., R.S.; Tex. S. Rule 4.03,

Tex. S. Res. 3, 80th Leg., R.S.


Plaintiffs’ allegations

                Plaintiffs’ live pleading before the district court was their original petition, filed in

June 2006. In it, Plaintiffs sought relief under the Uniform Declaratory Judgments Act10 based on

claims that the Defendants violated article VIII, section 22(a) of the Texas Constitution and section

316.001 of the government code.          Plaintiffs seek “declaratory relief to stop and prevent

unconstitutional and illegal spending by the Texas State government.” They allege two chief


       10
            Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (West 1997 & Supp. 2006) (“UDJA”).

                                                   10
theories regarding how H.B. 1’s appropriation violates article VIII, section 22 or chapter 316, as well

as a theory that chapter 316 violates the separation of powers.

                  Plaintiffs allege that the legislature’s requirement that the “estimated rate of growth

of the state’s economy” be presumptively based solely on growth in Texas’s total personal income,

see Tex. Gov’t Code Ann. § 316.002(b) & (c), and the LBB’s sole reliance on that measure, are

inconsistent with the text and intent of article VIII, section 22(a). As a matter of constitutional

interpretation, Plaintiffs urge, the “estimated rate of growth of the state’s economy” means growth

of the entire state economy, not merely the growth of a single component—personal income.

Plaintiffs also rely on the legislative history of article VIII, section 22. They observe that the

legislature apparently considered but eventually rejected a version of subsection (a) that would have

explicitly tied the spending limit to growth in personal income,11 and urge us to infer intent to reject


        11
           As introduced in the house of representatives, the proposed Tax Relief Amendment, in
relevant part, would have limited the growth of all legislative appropriations from state tax revenue
to a fixed annual increase of 7½ percent. H.J. of Tex., 65th Leg., 2d C.S. 9 (1978). That provision
was deleted entirely in the committee substitute, see id. at 92, but the following provision was later
added through a house floor amendment:


             That Article VIII of the Texas Constitution be amended by adding Section 21 to
             read as follows:

             Sec. 21 (a) Except as otherwise provided by this Section, legislative appropriations
             from State tax revenue for a fiscal biennium may not exceed the total of those
             appropriations for the preceding biennium by more than would result from a
             percentage equaling the percentage of growth of total personal income of the State
             during the previous biennium, as reported by the Comptroller of Public Accounts.

                     (b) The limitation in subsection (a) hereof shall not apply to appropriations
             and tax increases necessary to provide for reimbursement to school districts to
             replace revenues lost by partial or total abolition of ad valorem property taxes.

                                                     11
personal income growth as the sole basis for the spending cap. Plaintiffs allege that “this barometer

[personal income growth] has been historically proven to wildly overstate the growth of the state’s

economy,” causing spending caps set on that basis to permit appropriations exceeding the true

constitutional limit. Plaintiffs complain that, in this way, H.B. 1’s appropriation is unconstitutional

relative to the “real” rate of economic growth as compared to both the baseline of the 2004-2005

biennium and 1978, when article VIII, section 22 was ratified. Regarding the latter, Plaintiffs

complain that overestimations of economic growth have “compounded over the decades” without

correction, causing the spending cap to likewise deviate from constitutional requirements.12

                 Second, Plaintiffs allege that the mechanisms the legislature has adopted to

implement and enforce article VIII, section 22—chiefly found in chapter 316 of the government



                    (c) If the legislature by adoption of a resolution approved by a record vote
            of three-fifths of the members of each house, finds that an emergency exists and
            identifies the nature of the emergency, the legislature may provide for
            appropriations in excess of the amount authorized by Subsection (a) of this section.
            The excess authorized under this subsection may not exceed the amount specified
            in the resolution.

                    (d) In no case shall appropriations exceed revenues as provided in Article
            III, Section 49a.


Id. at 142-43. This version of the provision that became article VIII, section 22 remained in the
Taxpayer Relief Amendment passed by the house, id., but was deleted in the senate committee
substitute and omitted from the version approved by that chamber. Id. at 309. The conference
committee agreed on the language that now appears in article VIII, section 22, which was submitted
to and ratified by the voters.
       12
          To the extent Plaintiffs are complaining about specific appropriations and expenditures
made during prior biennia, as opposed to forthcoming expenditures under the H.B. 1 appropriation,
they would lack standing under the principles we discuss below. See Hoffman v. Davis, 100 S.W.2d
94, 95 (Tex. 1937).

                                                   12
code—constitute unconstitutional delegations of its legislative power to the LBB in violation of

separation-of-powers limitations.     Tex. Const. art. II, § 1.13     Plaintiffs also complain that

when enacting H.B. 1, the legislature relied on an upward revision of the LBB’s

original spending cap made by LBB staff—not the board itself—which, they contend, was invalid

and void.    Specifically, Plaintiffs allege—and the State Defendants acknowledge—that in

November 2004, the LBB approved a resolution complying with chapter 316 that set a spending limit

of $52.145 billion that could be appropriated from non-dedicated state tax revenues during the 2006-

07 biennium.14 Plaintiffs also allege—and the State Defendants agree—that the spending cap was

adjusted upward in late 2005 to $55.6 billion. In contending that this adjustment was void, Plaintiffs

emphasize statements in a December 2005 LBB publication that “[t]he [LBB] instructed staff to

adjust the level of 2004-2005 appropriations from state tax revenues not dedicated by the

Constitution and 2006-2007 spending limit calculations to reflect subsequent 2005 appropriations

certified by the Comptroller.” (Emphasis added).15 Plaintiffs urge that such an adjustment would

have been valid only if enacted by the legislature through general law procedures, or at least by the

LBB itself through a formal resolution under chapter 316. Because this upward adjustment of the




       13
             In their original petition, Plaintiffs also alleged unconstitutional delegation of
legislative powers to the committee established under section 316.005, but do not appear to
press this claim on appeal.
       14
           Notice of Meeting of the Legislative Budget Board, Agenda Item 3 (Nov. 17, 2004)
(C.R. 57, Ex. E to Plaintiff’s original petition).
       15
          Legislative Budget Board’s “Fiscal Size Up 2006-2007 Edition” (published Dec. 2005)
(C.R. 58, 61, Ex. F to Plaintiffs’ original petition).

                                                 13
spending cap was invalid, Plaintiffs assert, the cap remained at $52.145 billion, a level that

undisputedly was exceeded by subsequent appropriations for that biennium.

                  In the alternative, Plaintiffs allege that H.B. 1’s appropriation “cause[s] total

appropriations to exceed even the unapproved staff-generated limit by $1.3 billion

dollars.”    Plaintiffs allege—and the State Defendants acknowledge—that “based on the

appropriation[s] made prior to the 2006 special session, the Legislature had appropriated $53.0

billion in Non-Dedicated General Revenue Related Funds.” Plaintiffs concede that this left $2.6

billion in appropriations from non-dedicated state tax revenues that could have been made without

exceeding “the $55.6 billion staff generated unapproved limit.”16 Because H.B. 1’s appropriation

was $3.9 billion, Plaintiffs allege, it “caused total appropriations to exceed even the unapproved

staff-generated limit by $1.3 billion dollars.”

                  Plaintiffs request declarations including that “the appropriation in H.B. 1 . . . is

unconstitutional on the basis that i[t] exceeds the mandates of Article VIII, Section 22(a) as applied

since its enactment, or alternatively that said appropriation is unconstitutional on the basis that it

exceeds the mandates of Article VIII, Section 22(a) as applied over the last biennium, or alternatively

that said appropriation is unconstitutional because it exceeds even the extremely generous and faulty

estimates provided by the Legislative Budget Board and is, according to the LBB’s own calculations,

in violation of Article VIII, Section 22(a).”




       16
            Id.

                                                   14
Proceedings below

               The State Defendants filed a plea to the jurisdiction17 challenging only the sufficiency

of Plaintiffs’ pleadings; they did not challenge the jurisdictional facts Plaintiffs pleaded or submit

evidence in support of their plea. The State Defendants argued that Plaintiffs failed sufficiently to

plead standing or an ultra vires act (so as to avoid sovereign immunity18) and that the claims present

non-justiciable political questions. Following a brief hearing at which neither side presented

evidence, the district court ruled from the bench that it would grant the State Defendants’

jurisdictional plea and dismiss Plaintiffs’ suit. This appeal followed.


                                           DISCUSSION

               On appeal, Plaintiffs bring a single issue complaining that the district court erred or

abused its discretion in granting the State Defendants’ plea to the jurisdiction.


Standard of review

               A challenge to a trial court’s subject matter jurisdiction may be asserted in a plea to

the jurisdiction. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004);

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Whether a court has subject matter



       17
          Although named as a defendant, the Comptroller—then Carole Keeton Strayhorn—filed
an answer denying responsibility for the complained-of appropriations, as well as a “Statement of
Realignment” with Plaintiffs to the extent of “contending that meaningful control of, and effective
limitations on, state spending was intended by the voters in adopting Article VIII, § 22(a), and that
the same should be enforced by appropriate judgments of this Court, to the extent authorized by
law.” The Comptroller is not a party to this appeal.
       18
            See McLane Co. v. Strayhorn, 148 S.W.3d 644, 649 (Tex. App.—Austin 2004,
pet. denied).

                                                 15
jurisdiction is a question of law. Miranda, 133 S.W.3d at 226. The determination of whether a trial

court has subject matter jurisdiction begins with the pleadings. Id. The pleader has the initial burden

of alleging facts that affirmatively demonstrate the trial court’s jurisdiction to hear the cause. Id.

(citing Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). Whether

the pleader has met this burden is a question of law that we review de novo. Id. We construe the

pleadings liberally and look to the pleader’s intent. Id. If the pleadings do not contain sufficient

facts to affirmatively demonstrate the trial court’s jurisdiction but do not affirmatively demonstrate

incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be

afforded the opportunity to amend. Id. at 226-27; Elgin Indep. Sch. Dist. v. R.N., 191 S.W.3d 263,

272 (Tex. App.—Austin 2006, no pet.). If the pleadings affirmatively negate the existence of

jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an

opportunity to amend. Miranda, 133 S.W.3d at 227.

                However, “a court deciding a plea to the jurisdiction is not required to look solely

to the pleadings but may consider evidence and must do so when necessary to resolve the

jurisdictional issues raised.” Bland, 34 S.W.3d at 555. “When a plea to the jurisdiction challenges

the existence of facts alleged by the pleader to establish the trial court’s subject matter jurisdiction,

the trial court must consider relevant evidence submitted by the parties.” Miranda, 133 S.W.3d at

227 (citing Bland, 34 S.W.3d at 555). To varying degrees, this jurisdictional inquiry may also

implicate the merits of the pleader’s cause of action. Compare Bland, 34 S.W.3d at 554-55

(citing challenges to associational standing and personal jurisdiction as entailing “an evidentiary

inquiry [that] . . . does not involve a significant inquiry into the substance of the claims” and holding



                                                   16
that challenge to taxpayer standing did not implicate merits), with Miranda, 133 S.W.3d at 227-28

(describing overlapping jurisdictional and merits inquiry regarding challenge to whether parks and

wildlife department acted with gross negligence so as to waive sovereign immunity under the

recreational use statute). When the consideration of a trial court’s subject matter jurisdiction requires

the examination of evidence, the trial court exercises its discretion in determining whether the

jurisdictional determination should be made at a preliminary hearing or await fuller development of

the case, mindful that the jurisdictional determination must be made as soon as practicable.

Miranda, 133 S.W.3d at 227-28.

                “[I]n a case in which the jurisdictional challenge implicates the merits of the

plaintiff’s cause of action and the plea to the jurisdiction includes evidence, the trial court reviews

the relevant evidence to determine if a fact issue exists.” Id. at 227. This standard, which “generally

mirrors that of a summary judgment under Texas Rule of Civil Procedure 166a(c),” seeks to

reconcile “the fundamental precept that a court must not proceed on the merits of a case until

legitimate challenges to its jurisdiction have been decided” while “protect[ing] the interests of the

state and the . . . claimants in cases . . . in which the determination of the subject matter of the court

implicates the merits of the parties’ cause of action.” Id. at 227-28. Accordingly, when reviewing

a plea to the jurisdiction in which the pleading requirement has been met and evidence has been

submitted to support the plea that implicates the merits of the case, we take as true all evidence

favorable to the nonmovant and indulge every inference and resolve any doubt in the nonmovant’s

favor. Id. at 228. Whether the evidence presents a fact question regarding a jurisdictional fact is a

question of law that we review de novo. Id.



                                                   17
                 Because the district court did not specify its grounds for dismissal, we may affirm on

any meritorious ground on which the court could have relied. See Atmos Energy Corp. v. Abbott,

127 S.W.3d 852, 855 (Tex. App.—Austin 2004, no pet.); cf. Provident Life & Accident Ins. Co.

v. Knott, 128 S.W.3d 211, 216 (Tex. 2004) (applying principle in summary judgment context).

                 In the district court, as previously noted, the State Defendants challenged only the

sufficiency of Plaintiffs’ pleadings; they did not challenge jurisdictional facts or introduce evidence

to support their jurisdictional plea. However, Plaintiffs did attach evidence to their petition.

On appeal, the State Defendants attempt to broaden their challenge to attack certain jurisdictional

facts underlying Plaintiffs’ alternative claim that H.B. 1’s appropriation “exceeds even the extremely

generous and faulty estimates provided by the Legislative Budget Board and is, according to the

LBB’s own calculations, in violation of Article VIII, Section 22(a).” Specifically, they attach to their

brief two public records they assert conclusively establish that H.B. 1’s appropriation did not exceed

the spending cap as determined by the LBB: (1) the entirety of the Comptroller’s April 17, 2006

“Revenue Estimate for the 79th Legislature, Third Called Session,”19 and (2) an April 27, 2006

memo from the LBB’s deputy director to the Lieutenant Governor and Speaker stating that $3.95

billion in additional appropriations could be made from general revenue “without exceeding the

Article VIII, Section 22 limit.”20 The State Defendants acknowledge that these documents “were

not before the trial court,” but request us to take judicial notice of them, urging that the facts




        19
          Selected portions of this document were attached as Exhibits I and J to Plaintiffs’ petition,
but not the entire document.
       20
             As previously noted, H.B. 1 appropriated $3.825 billion.

                                                  18
stated within them are not subject to reasonable dispute and are capable of accurate and

ready ascertainment from reliable public sources. See Tex R. Evid. 201.

                Plaintiffs reply that the State Defendants are inappropriately seeking to litigate

the merits of their claims in the guise of a jurisdictional challenge. Allowing them to do so,

especially if allowed “to change theories and introduce evidence [on] appeal,” Plaintiffs urge,

is inconsistent with supreme court precedent and “fundamental notions of due process.”

In any event, Plaintiffs contend, the new documents “have no bearing” on whether the State

Defendants complied with the spending cap.

                We will address the specific question of whether we may consider the jurisdictional

challenge and evidence that the State Defendants seek to raise on appeal as they become relevant to

our analysis. However, the parties’ respective arguments suggest that we should clarify here some

broader principles governing our review. To the extent that Plaintiffs suggest that it is categorically

improper to adjudicate, through a jurisdictional plea, jurisdictional issues that implicate or overlap

the merits, that notion is belied by Miranda. See Miranda, 133 S.W.3d at 227-28 (regarding whether

parks and wildlife department acted with gross negligence so as to waive sovereign immunity under

the recreational use statute). It is also well-established that where a trial court’s jurisdiction depends

upon whether a state official’s acts are within her constitutional or statutory authority, such as when

a plaintiff alleges ultra vires action to avoid sovereign immunity, the trial court may sometimes be

able to decide the jurisdictional issue as a matter of law based on the pleadings by construing the

constitutional and statutory provisions defining the actor’s authority and ascertaining whether the

acts alleged would exceed that authority. See, e.g., McLane Co. v. Strayhorn, 148 S.W.3d 644, 649



                                                   19
(Tex. App.—Austin 2004, pet. denied) (acknowledging that in determining whether declaratory

judgment suit may be maintained against a state official, it was first necessary, in light of sovereign

immunity principles, to construe statutes defining official’s powers to “decide whether the [official]

validly exercised her discretion or acted outside of her legal authority.”); cf. Director of Dept. of

Agric. & Environ. v. Printing Indus. Ass’n, 600 S.W.2d 264, 265-70 (Tex. 1980) (construing

constitution to determine whether plaintiff alleged ultra vires action by state officials; state had

raised issue via special exceptions).21 And Miranda would further allow jurisdictional challenges,

via its summary judgment-like process, to the existence of the alleged acts that are asserted to have

been beyond the actor’s constitutional or statutory authority.

               Yet this does not mean that defendants and trial courts have free rein to “require[] that

the plaintiff prove his case . . . at the pleading stage, before any discovery has been conducted,” as

Plaintiffs contend occurred here. To succeed, a defendant challenging a jurisdictional fact via a plea

to the jurisdiction must satisfy the same initial burden as in a “traditional” summary

judgment—conclusively negating the existence of the fact—and judgment is proper in such instance

only if the plaintiff cannot present controverting evidence raising a genuine issue of material fact.

Miranda, 133 S.W.3d at 227-28. More generally, a trial court must exercise sound discretion in


       21
            Our decision in Davis v. Burnam is not to the contrary. 137 S.W.3d 325, 334-35
(Tex. App.—Austin 2004, no pet.). In relevant part, we vacated a trial court’s denial of a plea to the
jurisdiction that had challenged whether the plaintiff had alleged that a state agency director had
acted ultra vires. While we characterized the issue as involving “the merits” and turning on
“statutory construction” of the agency’s powers, the basis for our holding was that the plaintiff had
added this ultra vires claim only one day before a hearing on the plea to the jurisdiction related to
other claims and that the agency, therefore, had inadequate notice that the trial court might rule
regarding its jurisdiction over the newly-added claim, and inadequate opportunity to develop its
arguments and authorities. Id. & n.16.

                                                  20
deciding whether a jurisdictional determination implicating the merits “should be made at a

preliminary hearing or await a fuller development of the case, mindful that this determination must

be made as soon as practicable.” Id. at 227; see Bland, 34 S.W.3d at 554. It follows that a trial

court’s decision to determine a jurisdictional issue implicating the merits at a particular preliminary

stage of case development may be so arbitrary or unreasonable, given the state of the record, that

it constitutes an abuse of discretion. Cf. Davis v. Burnam, 137 S.W.3d 325, 334-35

(Tex. App.—Austin 2004, no pet.) (vacating trial court’s denial of jurisdictional plea turning

on statutory construction to determine whether alleged acts were ultra vires; defendant

had inadequate notice to brief and argue the issue).


Political question/self-executing constitutional provision

               The State Defendants argue that the district court’s dismissal of Plaintiffs’ claims

should be affirmed because the court lacked subject matter jurisdiction to provide a remedy for any

alleged violation of article VIII, section 22. They attempt to invoke the political question doctrine

and the related doctrine of self-executing constitutional provisions, each of which emanate from

separation-of-powers concepts. Long recognized in Texas law, the doctrine of self-executing

constitutional provisions is concerned with whether a provision confers sufficiently determinate

standards to permit judicial ascertainment and enforcement:


       A constitutional provision is said to be self-executing if it supplies a sufficient rule
       by means of which the right given may be enjoyed and protected, or the duty imposed
       may be enforced; and it is not self-executing when it merely indicates
       principles, without laying down rules by means of which these principles may
       be given force of law.



                                                  21
Neeley, 176 S.W.3d at 782 (quoting Mitchell County v. City Nat’l Bank, 43 S.W. 880, 883-84

(Tex. 1898) (quoting T. Cooley, Constitutional Limitations 99-100 (6th ed. 1890))). Similarly, a

“political question,” at least as it has been defined in the federal courts, is one that involves (1) “a

lack of judicially discoverable and manageable standards for resolving it,” or (2) “a textually

demonstrable constitutional commitment to a coordinate political department.” Id. at 777-78

(quoting Baker v. Carr, 369 U.S. 186, 217 (1963)).

               The State Defendants argue that article VIII, section 22(a), by requiring that “[t]he

legislature shall provide by general law procedures to implement this subsection,” including a

method for determining “the estimated rate of growth of the state’s economy,” embodies a “textually

demonstrable constitutional commitment” of these matters to the legislature. See Tex. Const. art.

VIII, section 22(a). And the requirement that “[i]n no biennium shall the rate of growth of

appropriations from state tax revenues not dedicated by this constitution exceed the estimated rate

of growth of the state’s economy,” the State Defendants urge, does not provide sufficiently definite

standards to permit judicial determination and enforcement.

               The State Defendants equate article VIII, section 22(a) to the constitutional provision

addressed in City of Corpus Christi v. City of Pleasanton, 276 S.W.2d 798, 803 (Tex. 1955). In

City of Pleasanton, the supreme court applied the doctrine of self-executing constitutional provisions

to article XVI, section 59 of the Texas Constitution, which declares that “[t]he conservation and

development of all the natural resources of this State [are] public rights and duties” and requires the

legislature to “pass all such laws as may be appropriate thereto.” Tex. Const. art. XVI, § 59. The

court held that this provision did not provide courts a basis to declare “what types of conduits



                                                  22
and reservoirs may be used for the transportation and storage of water, lawfully obtained

and lawfully used” or “declare the use of certain types of conduits and reservoirs to be unlawful

when the Legislature, by necessary implication, has declared them to be lawful.” City of

Pleasanton, 276 S.W.2d at 803.

               The State Defendants also rely on a prior decision of this Court in which we held that

the former article III, section 61 of the Texas Constitution did not confer a judicially enforceable

right. Texas Workers’ Comp. Comm’n v. City of Bridge City, 900 S.W.3d 411, 414-15

(Tex. App.—Austin 1995, writ denied). Article III, section 61 provided:


       The Legislature shall have the power to enact laws to enable cities, towns, and
       villages . . . to provide Workmen’s Compensation Insurance . . . and the Legislature
       shall provide suitable laws for the administration of such insurance in the said
       municipalities and for payment of the costs, charges, and premiums on policies of
       insurance and the benefits to be paid thereunder.


Tex. Const. art. III, § 61 (repealed November 6, 2001). We held that “the question of what is a

‘suitable’ law is not within the power of a court to decide. By its very nature, it is a political

question committed to the legislature because it calls for pure public policy decisions beyond a

court’s competence.” City of Bridge City, 900 S.W.3d at 415.

               Plaintiffs contend that article VIII, section 22(a) is comparable to article VII, section

1 of the Texas Constitution, and emphasize the Texas Supreme Court’s jurisprudence holding that

this provision is self-enforcing to the extent of prohibiting inconsistent laws and that claims under

it do not present non-justiciable political questions. Article VII, section 1 provides:




                                                      23
       A general diffusion of knowledge being essential to the preservation of the liberties
       and rights of the people, it shall be the duty of the Legislature of the State to establish
       and make suitable provision for the support and maintenance of an efficient system
       of public free schools.


Tex. Const. art. VII, § 1. The supreme court has repeatedly reaffirmed that challenges under this

provision to the “efficiency,” “adequacy” and “suitability” of Texas’s public school finance system

do not present non-justiciable political questions.          See Neeley, 176 S.W.3d at 776-80.22

Most recently, in Neeley, the court assumed without deciding that the Baker v. Carr test applied to

the Texas Constitution and reaffirmed that claims under article VII, section 1 did not present political

questions. Id. While acknowledging that article VII, section 1 “commits to the Legislature, the most

democratic branch of the government, the authority to determine the broad range of policy issues in

providing for public education,” id. at 778, the court reiterated that “[t]his duty is not committed

unconditionally to the legislature’s discretion, but instead is accompanied by standards.” Id. at 776

(quoting Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391, 394 (Tex. 1989) (“Edgewood I”)).

As for whether those “standards” were capable of judicial enforcement, the supreme court stated:


            Nor do we agree with the State defendants that the constitutional standards of
            adequacy, efficiency, and suitability are judicially unmanageable. These
            standards import a wide spectrum of considerations and are admittedly
            imprecise, but they are not without content. . . . The judiciary is


       22
           The supreme court did not explicitly hold that “suitability” claims under article VII,
section 1 were justiciable until after our Bridge City decision. Compare Neeley, 176 S.W.3d at 776-
80, with Texas Workers’ Comp. Comm’n v. City of Bridge City, 900 S.W.3d 411, 415
(Tex. App.—Austin 1995, writ denied) (emphasizing that the supreme court’s holding regarding
the “efficiency” clause in Edgewood Indep. Sch. Dist. v. Kirby, 777 S.W.2d 391, 394
(Tex. 1989) (“Edgewood I”), was “the only instance of which we are aware in which a court
has undertaken such a task.”).

                                                   24
           well-accustomed to applying substantive standards the crux of which is
           reasonableness. This is not to say that the standards in article VII, section 1
           involve no political considerations beyond the judiciary’s power to determine.
           We have acknowledged that much of the design of an adequate public
           education system cannot be judicially prescribed. Litigation over the adequacy
           of public education may well invite judicial policy-making, but the invitation
           need not be accepted. The judiciary’s choice is not between complete
           abstinence from article VII, section 1 issues, and being, in the State defendants’
           words, “the arbiter of education and policy, overseeing such issues as
           curriculum and testing development, textbook approval, and teacher
           certification.” Rather, the judiciary’s duty is to decide the legal issues properly
           before it without dictating policy matters. The constitutional standards provide
           an appropriate basis for judicial review and determination.


Id. at 778-79; see also Edgewood I, 777 S.W.2d at 394 (“By express constitutional mandate, the

legislature must make ‘suitable’ provision for an ‘efficient’ system for the ‘essential’ purpose of a

‘general diffusion of knowledge.’ While these are admittedly not precise terms, they do provide

a standard by which this court must, when called upon to do so, measure the constitutionality of

the legislature’s actions.”).

                The Neeley court similarly rejected the contention that article VII, section 1 was not

self-executing and not susceptible to judicial action to enforce its provisions. 176 S.W.3d at 782-83.

While recognizing that article VII, section 1 was not “self-executing” in the sense of mandating

the specific means through which the legislature must comply with its duty under that provision,

the court held that it was “self-executing” to the extent of prohibiting legislative action

inconsistent with the provision:


           The standards of article VII, section 1—adequacy, efficiency, and
           suitability—do not dictate a particular structure that a system of free public
           schools must have. We have stressed this repeatedly. . . . But . . . article VII,
           section 1 dictates what the public education system cannot be: it cannot be so

                                                   25
           inadequate that it does not provide for a general diffusion of knowledge, or so
           inefficient that districts which must achieve this general diffusion of knowledge
           do not have substantially equal access to available revenues to perform their
           mission, or so unsuitable that it cannot because of its structure achieve its
           purpose.

           Thus, we agree with the State defendants that article VII, section 1 does not
           provide the courts a basis for declaring what education or finance systems will
           alone satisfy its standards. But the provision is self-executing insofar as it
           prohibits any system that fails to meet those standards.


Id. at 783 (footnotes omitted). For this distinction, the supreme court relied on the rationale of

Mitchell County v. City Nat’l Bank, 43 S.W. at 883-84. Mitchell County involved two sections

of article XI of the Texas Constitution—section 2, which states that “[t]he construction of jails,

court-houses and bridges . . . shall be provided for by general laws,” and section 7, which prohibited

cities and counties from incurring debt for certain projects without imposing taxes for a sinking fund

to repay the debt—and article VIII, section 9, which limited the amount of certain taxes that cities

and counties could impose. Tex. Const. arts. VIII, § 9, XI, §§ 2, 7. The Mitchell County court stated

that “[i]n the sense that all laws in conflict with these prohibitions are void, section 9 of article 8 and

section 7 of article 11 are self-executing; but, in so far as anything is required to be done to carry

them into effect, they are not so, because they prescribe no rules by which any act could be done in

the enforcement of their requirements.” 43 S.W. at 882-83; see Neeley, 176 S.W.3d at 782

(summarizing this holding: “the constitutional provisions were self-executing only in prohibiting

conflicting laws and did not preclude statutes passed to effectuate the provisions.”).

                We agree with Plaintiffs that the Texas Supreme Court’s jurisprudence under article

VII, section 1 compels us to hold that article VIII, section 22 is self-executing to the extent of



                                                    26
prohibiting legislative action inconsistent with its provisions, and that Plaintiffs’ claims of violations

do not present non-justiciable political questions.23 Although the legislature is delegated the

authority to make laws to implement article VIII, section 22(a), this is not the sort of broad

delegation to enact “laws as may be appropriate” at issue in City of Pleasanton, 276 S.W.2d at 803,

or even the mandate to “provide suitable laws” we addressed in City of Bridge City. This authority

is “not committed unconditionally to the legislature’s discretion, but instead is accompanied by

standards.” Neeley, 176 S.W.3d at 776-77 (quoting Edgewood I, 777 S.W.2d at 394). Specifically,

legislation that purports to implement the requirement that “[i]n no biennium shall the rate of growth

of appropriations from state tax revenues not dedicated by this constitution exceed the estimated

rate of growth of the state’s economy” must necessarily be consistent with those standards.

Mitchell County, 43 S.W. at 882-83.

                Although the standards of article VIII, section 22(a) “are admittedly not precise

terms,” Neeley, 176 S.W.3d at 776-77 (quoting Edgewood I, 777 S.W.2d at 394), they surely must

be considered sufficiently determinable and enforceable by courts if, as the supreme court has held,

such nebulous concepts as “adequacy,” “efficiency,” and “suitability” under article VII, section 1 are.

In sum, article VIII, section 22(a) gives the legislature the “sole right to decide how to meet the

standards set by the people” in that provision, but “the Judiciary has the final authority to determine




        23
           In their original petition, Plaintiffs requested several declarations that would have specified
particular methods by which the State Defendants or the legislature would be required to calculate
the rate of growth in the state economy or the spending cap. On appeal, Plaintiffs appear to have
conceded that they would not be entitled to those sorts of declarations, but only those determining
that article VIII, section 22 has been violated.

                                                   27
whether they have been met.” Id. at 777 & n.169 (quoting West Orange-Cove Consol. Indep. Sch.

Dist. v. Alanis, 107 S.W.3d 558, 563-64 (Tex. 2003)).

                 Our reasoning is further informed by the Neeley court’s observations that non-

justiciable political questions are rare, id. at 779-80, and that City of Pleasanton is the sole instance

in which it has used the doctrine of self-executing constitutional provisions to preclude judicial

action. Id. at 782-83. We are also mindful of the supreme court’s observations that while the Texas

Constitution does not empower the judicial branch to engage in legislative policymaking in the

guise of constitutional interpretation, neither does it permit courts to avoid their duties, when

called upon, to strike down laws that are inconsistent with constitutional provisions. Id. at 776-82.

As the supreme court observed when first summoned to strike down an act of the

Republic of Texas Congress:


           [W]e have not been unmindful of the magnitude of the principles involved, and
           the respect due to the popular branch of the government. . . . Fortunately,
           however, for the people, the function of the judiciary in deciding constitutional
           questions is not one which it is at liberty to decline. . . . [We] cannot, as the
           legislature may, avoid a measure because it approaches the confines of the
           constitution; [we] cannot pass it by because it is doubtful; with whatever doubt,
           with whatever difficulties a case may be attended, [we] must decide it, when
           it arises in judgment.


Morton v. Gordon, Dallam 396, 397-98 (Tex. 1841); see also Neeley, 176 S.W.3d at 777 (“what this

court said [in Morton] . . . is still true.”).

                 Because article VIII, section 22 is self-executing to the extent of prohibiting

legislative action inconsistent with its standards, which are judicially ascertainable, and because




                                                   28
Plaintiffs’ claims that these standards have been violated do not present a non-justiciable political

question, we cannot affirm the district court’s order of dismissal based on these doctrines.


Unlawful appropriation

                The State Defendants further contend that Plaintiffs lack standing and that their

claims are barred by sovereign immunity because they have not, and cannot, assert a valid claim that

H.B. 1’s appropriation is unlawful. Plaintiffs pleaded that they have standing as “residential and

business taxpayers,” an allegation that we construe, in the context of their other allegations, to assert

that they pay state taxes that could establish taxpayer standing.24 The Texas Supreme Court has

explained that “[i]n general, taxpayers do not have a right to bring suit to contest government

decision-making because . . . governments cannot operate if every citizen who concludes that a

public official has abused his discretion is granted the right to come into court and bring such

official’s public acts under review.” Bland, 34 S.W.3d at 555 (quoting Osborne v. Keith,

177 S.W.2d 198, 200 (Tex. 1944)). Unless standing is conferred by statute,25 taxpayers must show

as a rule that they have suffered a particularized injury distinct from that suffered by the general

public in order to have standing to challenge a government action or assert a public right. Id at 555-

56. Texas law, however, has long recognized an important exception to this general rule: a taxpayer

has standing to sue in equity to enjoin the illegal expenditure of public funds, even without showing

a distinct injury. Id.

        24
           The State Defendants “do not question that Hendee is a taxpayer under the facts set forth
in the pleadings.”
        25
             Plaintiffs do not contend that the UDJA alone suffices to confer them standing as
taxpayers.

                                                   29
                Plaintiffs contend that their pleadings allege facts bringing them within this exception.

The foundation of their standing theory is their contention that they have alleged sufficient facts that,

if proven, would establish that H.B. 1 violates article VIII, section 22 or chapter 316 (which, they

reason, would render illegal any expenditures made under the appropriation). See Tex. Const. art.

VIII, § 6 (forbidding expenditure of state funds “but in pursuance of specific appropriations made

by law”).26 For the same reasons, Plaintiffs urge that they have pleaded a valid claim of ultra vires

action that is not barred by sovereign immunity. See, e.g., Cobb v. Harrington, 190 S.W.2d 709, 712

(Tex. 1945) (recognizing that sovereign immunity does not bar claim of ultra vires acts);

McClane Co., 148 S.W.3d at 649.

                We conclude that the district court would have abused its discretion if it dismissed

on this basis Plaintiffs’ claims that (1) the use of personal income as the “sole barometer” of “the

estimated rate of growth of the state’s economy” causes the spending caps set on that basis to permit

unconstitutionally excessive appropriations, and that H.B. 1 is such an appropriation; and (2) their

alternative claim that the H.B. 1 appropriation “exceeds even the extremely generous and faulty

estimates provided by the Legislative Budget Board.” The dispositive issues—as they have evolved

on appeal—controlling whether Plaintiffs have validly pleaded each theory were not raised,

briefed, or developed in the district court.

                In their plea to the jurisdiction, the State Defendants contended that Plaintiffs’ claim

regarding the use of personal income to set the spending cap did not validly allege unlawful conduct


        26
           The State Defendants raise several other arguments disputing whether Plaintiffs have
adequately pleaded standing under the taxpayer exception. We address those arguments in the next
section of this opinion.

                                                   30
because the State Defendants had complied with section 316.002 of the government code, which

required the use of the personal income measure. As for whether section 316.002 itself might violate

article VIII, section 22, the State Defendants did not address that claim other than to comment that

“if Plaintiffs succeed in invalidating § 316.002(b),” injunctive relief (which Plaintiffs had not

requested) would be “premature” because the law presumes that the State Defendants would comply

with a declaration of the statute’s invalidity. On appeal, in response to questions from the Court

during oral argument, the parties have begun to address one aspect of a determination of whether

Plaintiffs’ allegations assert a valid claim that H.B. 1’s appropriation is unlawful: the standard for

establishing a violation of article VIII, section 22(a). The parties concur that the appropriate standard

is arbitrariness, the standard that the supreme court has applied to claims challenging Texas’s public

school finance system under article VII, section 1. See Neeley, 176 S.W.3d at 783-85.27 Yet much


        27
           An action is arbitrary when it is taken without reference to guiding rules or principles.
Neeley, 176 S.W.3d at 784 (citing General Tire, Inc. v. Kepple, 970 S.W.2d 520, 526 (Tex. 1998)).
Whether a legislative enactment is arbitrary and therefore unconstitutional is a question of law.
Id. at 785. Although this determination may rest in part upon determinations of disputed factual
matters, such findings “have a limited role” in deciding ultimately the constitutional issues. Id.

           As applied to article VII, section 1, the arbitrariness standard accounts for the discretion
the constitution affords the legislature in fashioning a public school finance system satisfying the
requirements of “adequacy,” “efficiency,” and “suitability” while recognizing the judiciary’s proper
role in enforcing these requirements:


             If the Legislature’s choices are informed by guiding rules and principles properly
             related to public education—that is, if the choices are not arbitrary—then the
             system does not violate the constitutional provision.

             For article VII, section 1, as with other provisions, “[t]he final authority to
             determine adherence to the Constitution resides with the Judiciary.” As we have
             said, “‘a mere difference of opinion [between judges and legislators], where
             reasonable minds could differ, is not a sufficient basis for striking down legislation

                                                     31
remains to be addressed concerning how this standard would apply here. Because the parties have

not had an adequate opportunity to develop these issues, the district court would have abused its

discretion by dismissing Plaintiffs’ claim on this basis. See Davis, 137 S.W.3d at 335 & n.16.

                 Similarly, the State Defendants did not separately challenge the district court’s subject

matter jurisdiction over Plaintiffs’ alternative claim that H.B. 1’s appropriation, even by the LBB’s

own measures under section 316.002(b), exceeded the spending cap. On appeal, as previously noted,

the State Defendants attempt to initiate a challenge to the jurisdictional fact of whether H.B. 1’s

appropriation exceeded the spending limit set by the LBB, which they attempt to support with

evidence they did not present to the district court. Although subject matter jurisdiction, as a general

principle, may be challenged for the first time on appeal (and may be raised by an appellate court

sua sponte), see Texas Ass’n of Bus., 852 S.W.2d at 445-46 (considering associational standing of

appellant sua sponte),28 there are limits to this principle where the challenge concerns jurisdictional


            as arbitrary or unreasonable.’” At the same time, “[l]egislative action . . . is not
            without bounds.” In assessing challenges to the public school system under article
            VII, section 1, courts must not on the one hand substitute their policy choices for
            the Legislature’s, however undesirable the latter may appear, but must on the other
            hand examine the Legislature’s choices carefully to determine whether those
            choices meet the requirements of the Constitution. By steering this course, the
            Judiciary can assure that the people’s guarantees under the Constitution are
            protected without straying into the prerogatives of the Legislature.


Id. (footnotes and citations omitted).
       28
           In such instances, appellate courts must consider the petition, construed in the pleader’s
favor, and, if necessary, review the entire record to determine if any evidence supports subject matter
jurisdiction. Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).




                                                    32
evidence. Miranda indicates that where, as here, the challenge concerns a jurisdictional fact that

implicates the merits, such challenges must (1) be raised in the trial court, and (2) be supported by

jurisdictional evidence that conclusively negates the existence of the challenged jurisdictional fact.

This standard thus “generally mirrors” a “traditional” summary judgment motion. Miranda,

133 S.W.3d at 227-28 (citing Tex. R. Civ. P. 166a(a)). The supreme court explained that this

standard appropriately balances the competing interests of the state and claimants in cases where

jurisdictional issues also implicate the merits:


          We adhere to the fundamental precept that a court must not proceed on the
          merits of a case until legitimate challenges to its jurisdiction have been decided.
          This standard accomplishes this goal and more. It also protects the interests of
          the state and the injured claimants in cases like this one, in which the
          determination of the subject matter jurisdiction of the court implicates the
          merits of the parties’ cause of action. The standard allows the state in a timely
          manner to extricate itself from litigation if it is truly immune. However, by
          reserving for the fact finder the resolution of disputed jurisdictional facts that
          implicate the merits of the claim or defense, we preserve the parties’ right to
          present the merits of their case at trial. Similar to the purpose of a plea to the
          jurisdiction, which is to defeat a cause of action for which the state has not
          waived sovereign immunity (usually before the state has incurred the full costs
          of litigation), the purpose of summary judgments in Texas is “‘to eliminate
          patently unmeritorious claims and untenable defenses.’” Casso v. Brand,
          776 S.W.2d 551, 556 (Tex. 1989) (quoting City of Houston v. Clear Creek
          Basin Auth., 589 S.W.2d 671, 678 n.5 (Tex. 1979)). By requiring the state to
          meet the summary judgment standard of proof in cases like this one, we protect
          the plaintiffs from having to “put on their case simply to establish jurisdiction.”
          Bland, 34 S.W.3d at 554. Instead, after the state asserts and supports with
          evidence that the trial court lacks subject matter jurisdiction, we simply require
          the plaintiffs, when the facts underlying the merits and subject matter
          jurisdiction are intertwined, to show that there is a disputed material fact
          regarding the jurisdictional issue. See Huckabee v. Time Warner Entm’t Co.
          L.P., 19 S.W.3d 413, 420 (Tex. 2000); Phan Son Van v. Pena, 990 S.W.2d 751,
          753 (Tex. 1999).




                                                   33
Miranda, 133 S.W.3d at 228.

                When reviewing a summary judgment, an appellate court cannot consider

independent grounds—much less summary judgment evidence—not presented to the trial court. See,

e.g., Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996). We believe that Miranda

compels the same result regarding the State Defendants’ attempt to attack jurisdictional

facts with evidence on appeal.

                Bland Independent School District v. Blue may also be instructive. As discussed in

detail below, the case involved a school district’s appeal from a denial of its plea to the jurisdiction

challenging the standing of taxpayers to seek a permanent injunction against a school district’s

expenditures of funds relating to the construction of a school building. 34 S.W.3d at 549. In the

trial court, the district had presented evidence that the building had already been constructed, which

implicated the plaintiffs’ standing to sue as taxpayers. The trial court had refused to consider

the evidence in the belief that it was bound to consider only the pleadings, a ruling that the Texas

Supreme Court later held erroneous. Id. at 555. In reliance on the trial court’s decision not to

consider the evidence, the plaintiffs had not attempted to offer contrary evidence. Id. On appeal,

they urged the supreme court not to consider the district’s evidence without giving them the

opportunity on remand to have a full evidentiary hearing. Id. The supreme court stated that such

a remand would have been appropriate if the plaintiffs’ standing had been dependent on evidence

they had disputed and contended was not conclusive. Id. However, because the plaintiffs did “not

dispute BISD’s evidence that construction of the school building is complete,” the court proceeded

to consider “whether this undisputed evidence concerning the status of the project defeats



                                                  34
the [plaintiffs’] claim of standing.” Id. Here, Plaintiffs dispute the conclusiveness of the evidence

that the State Defendants would present on appeal.

               The State Defendants urge that Plaintiffs are not entitled to an opportunity to dispute

the new jurisdictional evidence they seek to present on appeal—the Comptroller’s revised April 17,

2006 revenue estimate and April 27, 2006 memo from the LBB’s deputy director—because those

documents together are conclusive proof that the spending cap was raised so as to permit $3.95

billion in additional appropriations. The State Defendants add that we are bound to take judicial

notice of these documents and these “conclusive” facts because they are part of the legislative history

of H.B. 1, see Humble Oil & Refining Co. v. Railroad Comm’n of Tex., 85 S.W.2d 813, 814

(Tex. Civ. App.—Austin 1935, writ dism’d), and may do so even on appeal because they concern

the district court’s subject matter jurisdiction. We disagree. The State Defendant’s argument

overlooks that they challenge the existence of a jurisdictional fact—whether, as Plaintiffs allege in

their alternative claim, the State Defendants exceeded the spending cap as determined by the LBB.

This issue of jurisdictional fact, as we have observed, overlaps with the merits of Plaintiffs’ claim.

In such instances, Miranda instructs trial courts to employ summary judgment-like procedures to,

among other things, protect plaintiffs against premature extinction of their claims in the guise of

jurisdictional rulings. Miranda, 133 S.W.3d at 228. Regardless of what the State Defendants’ new

jurisdictional evidence ultimately might show, their attempt to raise their challenge to jurisdictional

facts on appeal inescapably would improperly circumvent the procedural protections required by




                                                  35
Miranda.29 We also note that an appellate court’s decision to take judicial notice of a fact on appeal

is generally discretionary,30 and that appellate courts are generally reluctant to do so when such

evidence has not been presented to the trial court. See, e.g., Tran v. Fiorenza, 934 S.W.2d 740, 742-

43 (Tex. App.—Houston [1st Dist.] 1996, no writ). Thus, even if Miranda does not, strictly

speaking, compel our holding that we may not consider the State Defendants’ new jurisdictional

challenge and evidence, we exercise our discretion to decline to take judicial notice of this evidence

in light of our concerns that neither Plaintiffs nor the district court have had the opportunity to

address this evidence. For all of these reasons, we cannot affirm, based on the State Defendants’




       29
             Nor is it immediately obvious that the State Defendants’ jurisdictional evidence is
necessarily conclusive, though we express no opinion on that issue at this juncture. We agree with
the State Defendants that, at least under their alternative claim—which assumes the validity of the
LBB-set spending cap—Plaintiffs would not have a basis to “go behind” and dispute estimates
validly made by the Comptroller or LBB. However, Plaintiffs could nonetheless dispute whether
additional or subsequent estimates have superseded those made in April 2006. Also undeveloped
is the legal basis for the State Defendants’ assertions that the April 27 memo from the LBB’s deputy
director represents the official actions of the LBB itself. More to the point, Miranda contemplates
that Plaintiffs have that opportunity to raise such matters in the trial court, regardless of what the
jurisdictional evidence ultimately might establish.
       30
            See Martinez v. City of San Antonio, 768 S.W.2d 911, 914-15 (Tex. App.—San Antonio
1989, no writ) (citing Wellborn, Judicial Notice Under Article II of the Texas Rules of Evidence,
19 St. Mary’s L.J. 6, 20 (1987)). The State Defendants emphasize that this Court has previously
held itself bound to a mandatory duty, even when not requested by the parties, to take judicial notice
regarding administrative agency regulations published in the Texas Register or Texas Administrative
Code. Eckmann v. Des Rosiers, 940 S.W.2d 394, 399 (Tex. App.—Austin 1997, no pet.); see also
Office of Public Util. Counsel v. Pub. Util. Comm’n, 878 S.W.2d 598, 600 (Tex. 1994) (court of
appeals erred in refusing to take judicial notice of published P.U.C. order). We disagree that these
holdings concerning administrative regulations and decisions, which are akin to statutes and court
cases, would logically extend to the jurisdictional facts the State Defendants seek to challenge. See
also Eckmann, 940 S.W.2d at 399 (noting that government code requires courts to take judicial
notice of the contents of Texas Register and Texas Administrative Code).

                                                 36
new jurisdictional evidence, the district court’s dismissal of the Plaintiffs’ alternative claim regarding

compliance with the spending cap as set by the LBB.

                However, the district court would not have erred or abused its discretion in dismissing

Plaintiffs’ “unlawful delegation” claim based on the record before it. Plaintiffs’ pleadings regarding

that claim demonstrate fatal and incurable jurisdictional defects. See Miranda, 133 S.W.3d at 226-

27. Plaintiffs allege that the legislature violated separation-of-powers principles by improperly

delegating its legislative powers over the spending cap to the LBB or its staff. See Tex. Const. art.

II, § 1, interpretive commentary (“A settled maxim of constitutional law is that the power conferred

upon the legislature to make laws cannot be delegated by that department to any other body or

authority.”). However, as our earlier discussion of chapter 316 illustrates, the only “delegation” of

legislative power that Plaintiffs attack is merely an assignment of duties within the legislative branch

akin to each chamber’s referral of bills to committees prior to consideration before the entire

chamber. The Texas Constitution not only contemplates but requires each chamber of the legislature

to refer all bills to a committee, which must report the bill before consideration by the entire

chamber. Tex. Const. art. III, § 37. In similar fashion, the LBB, a permanent joint committee of the

Texas Legislature, Tex. Gov’t Code. Ann. § 322.001(a), proposes for each chamber’s consideration

budget and policy recommendations regarding proposed legislative appropriations, including a draft

General Appropriations Act each session, id. § 322.008(c); fiscal impact statements regarding other

proposed legislation, id. § 314.001; and calculations of the spending cap. As with bills reported from

other legislative committees, the ultimate legislative power—whether a bill containing an

appropriation is passed, amended, or rejected—remains not with the LBB or its staff, but with each



                                                   37
respective chamber and its individual members, who can utilize several procedural mechanisms to

resist passage of bills containing appropriations they believe would exceed the spending cap.

Id. §§ 316.006, 316.008. Plaintiffs accordingly cannot allege a violation of the constitutional

separation of powers on this basis.


Other standing issues

                The State Defendants raise additional, potentially dispositive challenges to Plaintiffs’

pleadings of standing. As previously noted, Plaintiffs rely on the exception to general standing

requirements that permits a taxpayer to sue in equity to enjoin the illegal expenditure of state funds,

even without showing a distinct injury. See Williams v. Lara, 52 S.W.3d 171, 180 (Tex. 2001);

Bland, 34 S.W.3d at 555-56; Calvert v. Hull, 475 S.W.2d 907, 908 (Tex. 1972) (citing with approval

Osborne v. Keith, 177 S.W.2d 198, 200-01 (Tex. 1944)); City of Austin v. McCall, 68 S.W. 791, 793-

94 (Tex. 1902); Terrell v. Middleton, 187 S.W. 367, 368-70 (Tex. Civ. App.—San Antonio 1916),

writ ref’d, 191 S.W. 1138 (Tex. 1918)). Plaintiffs contend that, because their pleadings allege that

the H.B. 1 appropriation is unconstitutional and illegal, they necessarily complain of the “specific

illegal expenditure” of state funds made pursuant to that appropriation. See Tex. Const. art. VIII, § 6

(requiring that state funds not be expended “but in pursuance of specific appropriations made by

law”). In addition to their challenges to Plaintiffs’ predicate allegations that the H.B. 1 appropriation

is illegal, the State Defendants contend that Plaintiffs fail to allege illegal expenditures sufficient to

bring them within the taxpayer standing exception. Specifically, the State Defendants urge that

(1) Plaintiffs were required to plead that expenditures are being made for particular illegal purposes

or ends, not merely that the amount of the appropriations authorizing the expenditures would exceed

                                                   38
the spending cap; and (2) the expenditures that Plaintiffs challenge should be deemed already spent.

See Bland, 34 S.W.3d at 556-57.31

               Regarding the State Defendants’ first argument, we disagree that Plaintiffs lack

standing to challenge “specific illegal expenditures” because they complain that a limit has been

exceeded and do not allege that the expenditures are directed specifically to unlawful purposes.

While many of the cases upholding taxpayer standing to enjoin illegal expenditures have involved

challenges to the legality of those expenditures’ purposes,32 we disagree that such facts preclude the

       31
          The State Defendants do not suggest that Plaintiffs lack standing to challenge prospective
unlawful expenditures under this exception merely because they have not yet sought an injunction
against those expenditures, but request only declarations that the H.B. 1 appropriation and
expenditures made under it are illegal. In fact, in their plea to the jurisdiction, the State Defendants
contended that injunctive relief would be “premature” before they had the opportunity to comply
with any declaration that the court might issue because “[t]he law presumes that a defendant will
recognize and respect the rights declared by a declaratory judgment and will abide by the judgment
in carrying out its duties.” Plea to the Jurisdiction, C.R. 139-40 (quoting Howell v. Texas Workers’
Comp. Comm’n, 143 S.W.3d 416, 433 (Tex. App.—Austin 2004, pet. denied)).

         At least to the extent that Plaintiffs properly challenge the legality of future expenditures
made under the H.B. 1 appropriation, we conclude that Plaintiffs would have standing to assert
that claim under the UDJA without seeking injunctive relief. While the UDJA does not expand a
trial court’s jurisdiction or dispense with the justiciability requirements of ripeness and standing, it
does provide a remedy where subject matter jurisdiction otherwise exists. Tex. Civ. Prac. & Rem.
Code Ann. § 37.003(a) (West 1997) (“A court of record within its jurisdiction has power to declare
rights, status and other legal relations . . . .”) (emphasis added); Texas Ass’n of Bus., 852 S.W.2d at
444. Thus, if Plaintiffs would have standing to seek an injunction to prevent expenditures that the
trial court determined to be illegal, the UDJA would likewise authorize them to obtain declarations
regarding the component issue of whether the expenditures were illegal. Cf. El Paso Co. Hosp. Dist.
v. Gilbert, 64 S.W.3d 200, 202-03 (Tex. App.—El Paso 2001, pet. denied) (where plaintiffs had
justiciable interest in controversy arising under section 26.04 of property code, they likewise had
standing to seek relief under UDJA).
        32
          See Williams v. Lara, 52 S.W.3d 171, 180-83 (Tex. 2001) (complaint of public funds
being expended at prison in violation of Establishment Clause); Calvert v. Hull, 475 S.W.2d 907,
908 (Tex. 1972) (suit to enjoin funds appropriated by legislature to procure site of University of
Texas of the Permian Basin on basis that conditions for appropriation were not met); Osborne

                                                  39
application of the taxpayer standing exception here. We see no meaningful distinction, for example,

between a taxpayer suit to enjoin expenditures under an allegedly void or illegal contract, long

permitted in Texas law, see Osborne, 177 S.W.2d at 200-01; McCall, 68 S.W. at 793-94, and a

taxpayer suit to prevent expenditures under an unlawful legislative appropriation, as Plaintiffs allege

here. In fact, state taxpayers have been permitted to sue to enjoin state expenditures based on

allegations that the expenditures would not be pursuant to a valid appropriation. See Johnson v.

Ferguson, 55 S.W.2d 153, 155 (Tex. App.—Austin 1932, writ dism’d) (challenging grant of

temporary injunction prohibiting further state highway construction contracts because there was not



v. Keith, 177 S.W.2d 198, 200-01 (Tex. 1944) (“recogniz[ing] the right of a taxpaying citizen to
maintain an action in a court of equity to enjoin public officials under a contract that is void or
illegal.”); City of Austin v. McCall, 68 S.W. 791, 793-94 (Tex. 1902) (same).

         Plaintiffs suggest that Terrell v. Middleton, the notable “chicken salad case,” see Hull,
475 S.W.2d at 908, is closely analogous to this case and squarely supports the proposition
that taxpayers may sue to enjoin state expenditures that exceed constitutional spending limits. In
fact, it is somewhat unclear whether the allegedly unlawful expenditures that conferred standing
upon the taxpayer plaintiff did so because the expenditures exceeded a constitutional limit or because
the purposes of the expenditures were allegedly unlawful. See 187 S.W. 367, 372-73
(Tex. App.—San Antonio 1916), writ ref’d, 191 S.W. 1138 (Tex. 1918). Terrell involved whether
the Comptroller could use state funds to pay certain entertainment bills incurred by the
governor—including chicken salad from the Driskill. Although these expenditures would have
violated constitutional limits on the amount of the governor’s salary, the court of appeals also
emphasized that the items that were to be paid by the Comptroller “were for private and individual
purposes, and not for the public good, and the appropriation made for that purpose by the Legislature
was directly in the face of article 16, § 6 of the Constitution, which commands that ‘no appropriation
for private or individual purposes shall be made.’” Id. at 372 (emphasis added). The court also
noted that “a lending of the credit of the State to a Governor for his private expenses, to increase his
compensation is not only a violation of the constitutional provision as to his compensation, but is
in violation of article 3, § 50, of the Constitution.” Id. at 373; see also Tex. Const. art. III, § 50
(prohibiting legislature from giving or lending credit of State to any person or pledging credit of
State in any manner whatsoever for payment of individual’s liabilities). The court’s opinion
concluded by stating that whenever taxes are imposed for private purposes, they “cease to be taxation
and become plunder.” Id. (quoting Waples v. Marrast, 184 S.W. 180, 182 (Tex. 1916)).

                                                  40
any legislative appropriation available for that purpose); Terrell, 187 S.W. at 374 (challenging

appropriation of $2,000 and additional $1,500 deficiency appropriation for Governor’s personal

expenses).    Similarly, county taxpayers have long been permitted to sue to enjoin county

expenditures not properly authorized in a budget, in contravention of the Uniform Budget Act.

See Garcia v. State, 290 S.W.2d 555, 559 (Tex. Civ. App.—San Antonio 1953, writ ref’d n.r.e.);

Guerra v. McClellan, 243 S.W.2d 715, 717 (Tex. Civ. App.—San Antonio 1951, no writ); see

also Act of May 21, 1931, 42nd Leg., R.S., ch. 206, 1929-31 Tex. Gen. Laws 339, repealed by

Act of April 30, 1987, 70th Leg., R.S., ch. 149, § 49(1), 1987 Tex. Gen. Laws 707, 1306 (current

version at Tex. Loc. Gov’t Code Ann. §§ 111.010, .039(b) (West 1999)). We reject the State

Defendants’ narrow view of the taxpayer standing exception.33



       33
            We also find unpersuasive the State Defendants’ attempts to equate Plaintiffs’ claims to
those asserted in Robinson v. Neeley, 192 S.W.3d 904, 911 (Tex. App.—Dallas 2006, no pet.), which
they cite for the proposition that “when the authority to engage in an activity is disputed, but not the
legality of the action itself, taxpayers have no standing to challenge it.” Robinson arose from the
education commissioner’s appointment of a board of managers to control the operations of the
Wilmer-Hutchins Independent School District. After the board voted to “essentially shut down the
district,” a group that included a district taxpayer sued for declaratory and injunctive relief. Their
petition was dismissed for want of standing, which the court of appeals affirmed. Regarding the
taxpayer’s standing, the court observed that “[n]owhere in appellants’ active pleading or their
brief do they accuse the Commissioner, the [board], or [the superintendent] of expending
public funds on illegal activity [but] complain that the expenditures were made by an
‘invalid’ board.” Id. at 911. The court further noted that “[a]ppellants cite no authority for
the proposition that a public officer, performing his duties in good faith, is engaged in an
illegal activity if his authority is in dispute.” Id.

        In an attempt to bring this case within Robinson, the State Defendants characterize Plaintiffs’
claims as “attack[ing] only the process by which the funds were allocated.” Plaintiffs’ claims are
clearly not so limited. They challenge expenditures claimed to be unlawful because they are being
made pursuant to allegedly unconstitutional or unlawful appropriations. At most, Robinson might
have implications for Plaintiffs’ standing to assert their claims that chapter 316 unlawfully delegates
legislative power to the LBB, a claim that we have already held is barred by lack of standing and
sovereign immunity.

                                                  41
                 Turning to the State Defendants’ second argument, it is well-established

that taxpayers have standing only to challenge prospective state expenditures, but do not

have standing to complain of public funds that have already been spent. As the supreme court

has explained:


          When a taxpayer brings an action to restrain the illegal expenditure . . . of tax
          money he sues for himself, and it is held that his interest in the subject-matter
          is sufficient to support the action; but when the money had already been spent,
          an action for its recovery is for the [taxing entity]. The cause of action belongs
          to it alone.


Hoffman v. Davis, 100 S.W.2d 94, 95 (Tex. 1937); see Bland, 34 S.W.3d at 556-58. The State

Defendants assert that the expenditures authorized under the appropriations in H.B. 1 “have

essentially already been spent.” They apparently mean this in a functional rather than literal sense.

The State Defendants urge that “schools across the state have relied on this funding in planning their

yearly budgets as though they have been received and placed in permanent use,” and that “[t]o

reverse the appropriation would upset the settled expectations of the district and their employees.”

The State Defendants rely on an extension of the principles applied in Bland.

                 In Bland, taxpayers sued to enjoin a school district from making payments under

what they contended was an invalid lease-purchase agreement with Citicorp. The district had entered

into the agreement to help finance the construction of a new high school. By the time of suit, the

new building had already opened, the district had paid the contractor in full, and the only obligation

that remained was for the district to make semiannual loan repayments to Citicorp through 2011.




                                                 42
34 S.W.3d at 549-50. Under these circumstances, the supreme court held that the taxpayers lacked

standing to sue the school district to enjoin the future loan repayments. The court explained:

           We are not inclined to extend the exception to taxpayer standing to include the
           Blues’ suit. The jurisprudential justification for taxpayer suits to enjoin
           performance of illegal agreements is that the interference such suits pose to
           government activities is slight in comparison to the protection afforded
           taxpayers from preventing the culmination of illegal agreements made by
           public officials. But the balance in costs and benefits shifts significantly once
           the governmental entity has received all that it bargained for and must simply
           pay for it. We need not decide here whether a governmental entity’s receipt of
           something less than full performance under an allegedly illegal agreement is
           enough to preclude a taxpayer suit to prohibit future performance. When all
           that remains is a school district’s repayment of a loan for work completed,
           allowance of a taxpayer action to prohibit such repayment threatens a
           substantial interference with governmental actions. The Blues’ action not only
           threatens BISD’s already substantial investment in its high school, and what by
           now are the settled expectations of other taxpayers in the district who are also
           served by the high school, but should the action succeed on the merits, it would
           signal increased risks to lenders and others in dealing with governmental
           entities. The potential for disruption of government operations is too great to
           allow a taxpayer with no special injury distinct from the general public’s to sue
           to prohibit the government from paying for goods and services it has already
           received and placed in permanent use.


Id. at 557-58. The State Defendants urge that “the school districts and teachers, just as the building

contractor in Bland, have ordered their operations based on an expectation of payment from the

State,” that “[t]o deprive teachers of salary increases and school districts of money for their operating

budgets midway through the year is precisely the ‘disruption’ the Bland Court sought to avoid,” and

that we should conclude that “the money is, as a matter of law, already spent.”

                Unlike the Bland school district, however, the State Defendants have not developed

an evidentiary record that might support such a conclusion. As previously noted, they did not present

evidence in support of their plea to the jurisdiction, and rely entirely upon broad, unsupported



                                                   43
assumptions about the effect of H.B. 1 on Texas school districts. Moreover, this legal theory was

not presented to the district court, and the parties have only begun to address it on appeal. Especially

under these circumstances, we are reluctant to adopt the State Defendants’ proposed extension of

Bland’s rationale. See Davis, 137 S.W.3d at 334-35 & n.16; see also Petco Animal Supplies, Inc.

v. Schuster, 144 S.W.3d 554, 565 (Tex. App.—Austin 2004, no pet.). Given the state of the record

and the law, this argument does not provide us a basis for affirming the district court’s order.


Issues raised sua sponte

          Associational standing

               While the State Defendants have not separately challenged the associational

standing of C.L.O.U.T., we must consider that issue sua sponte. See Texas Ass’n of Bus.,

852 S.W.2d at 445-46. An association has standing to sue on behalf of its members if: (1) its

members would otherwise have standing to sue in their own right; (2) the interests the organization

seeks to protect are germane to the organization’s purposes; and (3) neither the claim asserted nor

the relief requested requires the participation of individual members in the lawsuit. Id. (adopting

the test from Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977)).

We construe Plaintiffs’ allegation that C.L.O.U.T. would have standing as a state taxpayer as

an assertion that its members would have individual standing to sue as taxpayers, thus

addressing the first element of the associational standing test. However, Plaintiffs’ pleadings do

not address the remaining elements, nor is there evidence establishing these elements in

the attachments to their pleadings. See id. But because Plaintiffs’ pleadings do not affirmatively




                                                  44
negate these elements but merely fail to address them, Plaintiffs are entitled to the opportunity to

amend. See Miranda, 133 S.W.3d at 226-27; Elgin, 191 S.W.3d at 272.


          The concurrence’s “ripeness” concern

               Finally, the concurrence would decline to address any issue in this case other than

those concerning the claim alleging unconstitutional delegation of powers. The stated basis is that

the other claims are not “ripe for decision” and that a “fuller ventilation of pleadings, evidence, and

briefing in the district court” would be needed to avoid an advisory opinion. We do not view

ripeness as an issue in this case. Ripeness concerns whether, at the time a lawsuit is brought, the

facts have developed sufficiently such that an injury has occurred or is likely to occur, rather than

being contingent or remote. Patterson v. Planned Parenthood, 971 S.W.2d 439, 442 (Tex. 1998).

It is a requirement of subject matter jurisdiction. Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849,

851 (Tex. 2000). If the State Defendants have acted in a manner so as to violate the spending cap,

as Plaintiffs allege, those actions have been completed and Plaintiffs’ claims are ripe. We also note

that none of the parties have suggested that ripeness is a problem, and that the remedy

the concurrence proposes—remand rather than dismissal—is inconsistent with the existence of a

ripeness defect. See id. at 853.

               The concurrence’s reference to a “fuller ventilation of the pleadings, evidence, and

briefing” may express a concern that there is a problem here with the State Defendants raising their

jurisdictional complaints through the procedural device of a plea to the jurisdiction without opting

for some other device like a summary judgment motion. Similar concerns were voiced by the

dissenting justices in Miranda, but their views did not carry the day. See id. at 234, 235-36

(Jefferson, C.J., dissenting); id. at 239, 239-45 (Brister, J., dissenting). The concurrence may intend

                                                  45
its comments as an invitation to the supreme court to revisit Miranda. If so, it would seem more

direct to simply say so. In any event, as an intermediate appellate court, we are bound to follow

Miranda until the supreme court reverses or modifies that decision. Petco, 144 S.W.3d at 565. To

the extent the concurrence expresses concerns that issues have been raised for the first time on appeal

without the development of an adequate record, we have noted those issues and have remanded them

for further proceedings.


                                          CONCLUSION

               For the foregoing reasons, we affirm the district court’s dismissal of Plaintiffs’ claim

alleging unconstitutional delegation of legislative powers for want of jurisdiction. However, to the

extent that Plaintiffs’ remaining two claims seek declarations that future expenditures under H.B.1’s

appropriation are unconstitutional or illegal, the district court erred or abused its discretion in

dismissing those claims based on the record before it, and we reverse those portions of the district

court’s judgment. Additionally, we hold that, while Plaintiffs failed to sufficiently plead the

associational standing of C.L.O.U.T., Plaintiffs are entitled to leave to amend to address that defect.




                                               Bob Pemberton, Justice

Before Justices Patterson, Pemberton and Waldrop;
          Concurring Opinion by Justice Patterson

Affirmed in part; Reversed and Remanded in part on Motion for Rehearing

Filed: May 25, 2007


                                                  46
