As many of you are aware from press reports, on Monday a pair of renewable energy companies filed a petition for a writ of mandamus asking the Texas Supreme Court to compel the Comptroller to certify their projects for Chapter 313 limitation agreements in five school districts by the end of the year. In re Stetson Renewables Holdings, LLC and Ogallala Renewable Project, LLC (No. 22-1119) involves some of the hundreds of Chapter 313 applications filed earlier this year to beat the December 31, 2022 expiration date for the program. In November, the Comptroller notified the two companies that he would be unable to meet the statutory 90-day deadline for certification that runs from the date the Comptroller notifies an applicant that its application is complete.
Both companies are out-of-state entities, Stetson a Florida-based entity and Ogallala a project owned by Oakland, California-based Orion Renewable Energy Group LLC. They submitted applications to Bynum ISD, Hart ISD, Holliday ISD, Miller Grove ISD, and Sulphur Springs ISD last May. In each case the Comptroller issued notice of a completed application on August 12, which started the 90-day certification clock. The clock ran out on November 10, and the Comptroller subsequently issued no-action letters dated November 18 but received by the applicants until early December.
The petition argues that the 90-day certification deadline is non-discretionary and that Chapter 313 does give the Comptroller authority to simply let the time run out without taking action. In this case, the petition alleges, the Comptroller had previously determined that each of the projects was eligible for a limitation. Pointing out that the Comptroller certified other projects whose applications were filed after those of the Relators (including a Tesla project in Robstown ISD), the petition contends that the Comptroller should have contracted with a third party if necessary to conduct the evaluation on a timely basis, as permitted by the statute (§ 313.025(b), Tax Code). Relators ask the Court to order the Comptroller to extend both the 90-day deadline and the December 31, 2022 expiration date in order to complete the process and, if needed, to retain a third party to assist. The Comptroller’s response is due Friday, December 16, at 4:30.
Judging by the press statement issued yesterday, the Comptroller is not amused. “Even though my office will certify more than 300 projects this year alone, it was apparently not enough,” the Comptroller stated. “This is a frivolous attempt to get the Texas Supreme Court to force my office to put even more resources toward the program in the final two weeks of its existence. My office has fully complied with the law and will vigorously defend our position.”
Setting aside the merit or lack thereof of their arguments, Relators are playing a high-stakes game that could well have implications far beyond the specific applications involved. It seems highly unlikely to us that SCOTX will, as the Comptroller states, “force [his] office to put even more resources toward the program” between now and the end of the year. Courts don’t generally tell statewide officials how to allocate their operational budgets. The election-related cases relied on by Relators in their petition, which ordered the secretary of state to certify candidates for the ballot beyond the statutory deadline, certainly don’t do that, and making sure that representative government operates properly seems a far cry from policing the administration of a tax incentive program entrusted to a statewide elected official. We suspect that the Court will be very mindful of separation of powers here.
In addition to that, whether the Court has the stomach to extend statutory deadlines—especially the end date of the statute authorizing the program in the first place—seems dubious to us. Nothing in Chapter 313 compels the Comptroller to approve an application or change his determination that a project qualifies for a limitation. We can also think of no case in which the Court has intervened to keep a statute in effect beyond its legislative mandated expiry date. Again, this Court will be leery of getting into the Legislature’s business to that extent.
Finally, suing the Comptroller over Chapter 313, a politically controversial program the Legislature definitively and purposefully allowed to expire, could complicate efforts to craft a new incentive program to take its place this session. As much heartburn as some of the legislative leadership and a lot of members have with renewable energy projects in general and with wind projects in particular, this lawsuit will hardly come as a cooling dose of antacid. And if you’re asking the Comptroller to take on the considerable burden of administering a new incentive program, especially one that includes renewable energy projects, poking him and his staff in the eye might not be the best way to make him happy about doing that.
