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Nootsie, Ltd. v. Williamson County Appraisal Dist.
July 12, 1996
925 S.W.2d 659
Texas Supreme Court
Published Opinion

Nootsie, Ltd. v. Williamson County Appraisal Dist.

Supreme Court of Texas.

NOOTSIE, LTD. and State of Texas, Petitioners,



No. 95–1041.


Argued April 16, 1996.


Decided July 12, 1996.

Attorneys & Firms

*660 Christine Monzingo, Austin, for Petitioners.

Judith A. Hargrove, Austin, for Respondent.


*661 SPECTOR, Justice, delivered the opinion of the Court, in which PHILLIPS, Chief Justice, and ABBOTT, Justices, join.

Following the voters’ passage of a constitutional amendment calling upon the Legislature “[t]o promote the preservation of open-space land,” the Legislature defined ecological laboratories as property promoting “farm and ranch purposes.” The question here is whether the Legislature acted constitutionally. The trial court ruled that the ecological laboratory provision is constitutional. The court of appeals reversed. 905 S.W.2d 289, 292. We hold that the statute is constitutional and therefore reverse the judgment of the court of appeals.


The Texas Constitution commands that “[t]axation shall be equal and uniform” and that real property “shall be taxed in proportion to its value.” Lively v. Missouri, K. & T. Ry. Co., 102 Tex. 545, 120 S.W. 852, 856 (1909). In 1978, the voters added the following amendment to the Constitution:

To promote the preservation of open-space land, the legislature shall provide by general law for taxation of open-space land devoted to farm or ranch purposes on the basis of its productive capacity and may provide by general law for taxation of open-space land devoted to timber production on the basis of its productive capacity. The legislature by general law may provide eligibility limitations under this section and may impose sanctions in furtherance of the taxation.

TEX. CONST. art. VIII, section 1–d–1(a). The Legislature then defined “open-space land” subject to productive capacity taxation as

land currently devoted principally to agricultural use to the degree of intensity generally accepted in the area and that has been devoted principally to agricultural use or to production of timber or forest products for five of the preceding seven years or land that is used principally as an ecological laboratory by a public or private college or university.

TEX. TAX CODE § 23.51(1) (emphasis added).

Nootsie, Limited, owns land subject to ad valorem taxation by both the Travis County and Williamson County Appraisal Districts. As stipulated at trial, the property qualifies under article VIII, section 1–d–1(a) of the Texas Constitution. The district’s appraisal review board agreed.

Nootsie then filed an appeal for judicial review. The district answered and filed a counterclaim and third-party petition naming the Attorney General of Texas as a third-party defendant. The district sought a declaratory judgment that section 23.51(1) violates the Constitution because of the inclusion of ecological laboratories as open-space land.

The trial court ruled that Constitution. See 905 S.W.2d at 291–93.


A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy. See Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex.1988). Nootsie argues that the district had *662 neither standing nor capacity to file its counterclaim. We disagree with Nootsie’s standing argument and do not reach its capacity argument.

Although Nootsie never raised standing at trial, it may raise the issue on appeal for the first time because standing implicates the trial court’s subject matter jurisdiction. See Board of Water Engineers v. City of San Antonio, 155 Tex. 111, 283 S.W.2d 722, 724 (1955)).

Nootsie argues that as a political subdivision of the State, the district has no inherent vested rights protected by the Constitutions of Texas and the United States. See Robbins v. Limestone County, 114 Tex. 345, 268 S.W. 915, 917 (1925) (holding that county and road districts can sue the state highway commission on the ground of the invalidity of statutes).

We do not reach the merits of Nootsie’s argument that the district acted without legal authority when it contested the constitutionality of the statute. After the district filed its counterclaim and third-party petition against the state, neither Nootsie nor the Attorney General raised the capacity issue. Unlike standing, an argument that an opposing party does not have the capacity to participate in a suit can be waived. Pledger, 762 S.W.2d at 146. Here, Nootsie first questioned the district’s capacity in its briefing before this Court. Therefore, Nootsie has waived its complaint about capacity.


Nootsie argues next that section 23.51(1) does not violate the Texas Constitution and that the court of appeals erred by finding otherwise. We agree.

We presume that a statute passed by the Legislature is constitutional. Citizens Bank v. First State Bank, 580 S.W.2d 344, 347–48 (Tex.1979).

The district presents a facial challenge to City of El Paso v. El Paso Community College Dist., 729 S.W.2d 296, 298 (Tex.1986).

We hold today that Mumme v. Marrs, 120 Tex. 383, 40 S.W.2d 31, 35 (1931). In this case, the Legislature and political subdivisions have consistently interpreted “open-space land devoted to farm or ranch purposes” to include ecological laboratories. Indeed, the district appraised Nootsie’s property based upon its productive capacity for eleven years before abruptly deciding that the statute was unconstitutional; the Travis County Appraisal District likewise has repeatedly reaffirmed its view that an ecological laboratory qualifies for productive capacity taxation.

To prevail on a facial constitutional challenge, the district bears the heavy burden of showing that every application of article VIII, section 1–d–1(a) of the Texas Constitution.


We hold that the district had standing to file its counterclaim and that Nootsie waived its complaint about the district’s capacity to file the counterclaim. We further hold that the Legislature did not exceed its constitutional mandate when it included ecological laboratories in the definition of qualified open-space land in section 23.51(1) does not violate the Texas Constitution.

GONZALEZ, J., filed a concurring and dissenting opinion.

GONZALEZ, Justice, concurring and dissenting.

I concur with Part II of the Court’s opinion concerning standing. However, for the reasons set forth in its opinion, I agree with the court of appeals that 905 S.W.2d 289.

As the Court acknowledges, article VIII, sections 1(a) and 1(b) of the Texas Constitution *664 require that taxation shall be equal and uniform and that land shall be taxed in proportion to its value. In order to deviate from this norm, the Legislature submitted a constitutional amendment, article VIII, section 1–d–1, to the voters. According to the legislative history of this amendment, its purpose was to “[p]rovide for an alternative valuation of land devoted to farming, ranching, or timber production....” HOUSE COMM. ON CONSTITUTIONAL AMENDMENTS, BILL ANALYSIS, H.J.R. 1, § 2, 65th Leg., 2d C.S. (1978). The ballot submitted to the voters for approval described the proposed amendment as: “The constitutional amendment providing for tax relief for residential homesteads, elderly persons, disabled persons and agricultural land....” H.J.R. 1, CONFERENCE COMMITTEE REPORT, 65th Leg., 2d C.S. (1978). There was absolutely no mention of ecological laboratories in any promotional materials or in news stories or in editorials at the time the amendment’s passage was being promoted. Voters were kept completely in the dark that property with only indirect agricultural purposes, such as ecological laboratories, would qualify for favorable tax treatment.

The Court is swayed by the fact that the appraisal district “appraised Nootsie’s property based upon its productive capacity for eleven years before abruptly deciding that the statute was unconstitutional....” 925 S.W.2d 663. This fact is irrelevant to the question of whether the Legislature has authorized something which the Constitution prohibits. Equitable estoppel and laches have no bearing on the question.

In conclusion, the voters who ratified article VIII, section 1–d–1 of the Texas Constitution have been deceived. They were told one thing and the Legislature did another. The Legislature gave favorable tax treatment to a company that does not operate a farm or ranch of any kind in connection with its ecological laboratory, and raises no crops or animals for human or animal consumption. Is it any wonder that people become cynical and disillusioned with government?

End of Document