Court of Appeals of Texas, Third District, Austin
THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
NO. D-1-GN-16-000534, HONORABLE SCOTT H. JENKINS, JUDGE
Chief Justice Rose, Justices Kelly and Smith
Houston Independent School District (Houston ISD) sued the
Texas Workforce Commission to recover allegedly overpaid
unemployment taxes. See Tex. Lab. Code §§
213.071-.074. Both parties moved for summary judgment. After
a hearing on the controlling question of law and the
undisputed facts, the district court rendered final judgment
granting the Workforce Commission's motion, denying
Houston ISD's motion, and ordering each party to bear its
own costs. Houston ISD now appeals from that judgment. We
2011, the Commissioner of Education revoked the accreditation
of North Forest Independent School District (North Forest), a
school district near Houston. After North Forest's
unsuccessful appeal of that revocation, the Commissioner
ordered Houston ISD to annex North Forest's territory and
to assume its assets and debts. See Tex. Educ. Code
§ 13.054(a) ("The commissioner by order may annex
to one or more adjoining districts a school district that has
been rated as academically unacceptable for a period of two
years."). The Workforce Commission subsequently billed
Houston ISD for unemployment benefits paid to former North
Forest employees. Houston ISD refused to remit payment,
arguing: (1) it is not responsible for any sums due under
governing law, and (2) to the extent it might be responsible,
the county commissioners must make that determination.
See Tex. Educ. Code § 13.004(a).
Houston ISD learned it could not appeal the determination
without first paying the allegedly overdue sum, it remitted
nearly $4 million in benefits and interest and then filed
suit for judicial review district court. See Tex.
Lab. Code §§ 213.071-.074 (setting forth procedures
by which employer may "bring an action in a court of
competent jurisdiction in Travis County against the
commission for review of the commissions refusal to allow an
adjustment or a refund"). Both parties moved for summary
judgment on an undisputed record. The Workforce Commission
argued that Texas law renders Houston ISD a "successor
employer" responsible for any benefits distributed to
North Forest's former employees. See Tex. Lab.
Code § 204.086 (rendering employer acquiring
"substantially all of the assets of an
organization" "liable to the commission for prompt
payment of the contribution, penalty, or interest," if
at acquisition the acquired employer was indebted to
Workforce Commission). Houston ISD disagreed with that
construction, arguing that North Forest was not
"indebted" at the time of annexation and,
regardless, the county commissioners must approve Houston
ISD's assumption of any debt. See Tex. Educ.
Code § 13.004(a). Both parties moved for summary
judgment. The district court granted the Workforce
Commission's motion, denied Houston ISD's motion, and
rendered final judgment in the Workforce Commission's
favor. Houston ISD's motion for new trial was denied by
operation of law. Houston ISD perfected timely appeal of
judgment is proper when the evidence before the district
court shows there are no disputed issues of material fact and
the movant is entitled to judgment as a matter of law.
Tex.R.Civ.P. 166a(c). When both parties move for summary
judgment on overlapping issues, we undertake de novo review
of all evidence and issues presented, and, if the trial court
erred, render the judgment the trial court should have
rendered. Valence Operating Co. v. Dorsett, 164
S.W.3d 656, 661 (Tex. 2005); see also Tex. R. App.
parties ask this Court to resolve a single question of law:
whether, under relevant provisions of the Labor Code, an
annexing school district must reimburse the State for
unemployment benefits distributed to former employees of the
annexed district after annexation is ordered pursuant to
Chapter 13 of the Education Code. See Tex. Educ.
Code § 13.054(a). "We review questions of statutory
construction de novo, and our primary objective is to give
effect to the Legislature's intent as expressed in the
language of the statute." Risk Mgmt. Strategies,
Inc. v. Texas Workforce Comm'n, 464 S.W.3d 864, 868
(Tex. App.-Austin 2015, pet. dism'd) (citing Railroad
Comm'n v. Texas Citizens for a Safe Future & Clean
Water, 336 S.W.3d 619, 624 (Tex. 2011); First Am.
Title Ins. Co. v. Combs, 258 S.W.3d 627, 632 (Tex.
2008)). "We discern legislative intent from the statute
as a whole, not from isolated portions." Id.
(citing 20801, Inc. v. Parker, 249 S.W.3d 392, 396
(Tex. 2008)). "Absent an absurd result, we rely on the
plain meaning of the text unless a different meaning is
supplied by legislative definition or is apparent from the
context." Id. (citing City of Rockwall v.
Hughes, 246 S.W.3d 621, 625-26 (Tex. 2008)).
Texas Unemployment Compensation Act provides short-term
financial relief for individuals who become unemployed
through no fault of their own. See Keen v. Texas
Unemployment Comp. Comm'n, 148 S.W.2d 211, 212 (Tex.
App.-Galveston 1941, no writ). The program is funded in part
through taxes levied on employers. Lally v. State,
138 S.W.2d 1111, 1112 (Tex. App.-Austin 1940, no writ). By
default, a covered employer must remit a contribution
calculated as a function of its total payroll, the benefits
provided to its former employees in the previous calendar
year, and other factors not relevant here. See Tex.
Lab. Code § 204.103(a)-(b). In the alternative, Chapter
205 of the Labor Code allows governmental employers to elect
"to pay reimbursements for benefits instead of
contributions." See id. § 205.001. These
"reimbursing employers" must make a payment of 100%
of the regular and extended benefits actually paid to former
employees during that quarter. See id. §
205.013(a)-(c). In this case, Houston ISD and North Forest
each elected classification as reimbursing employers for the
pertinent time periods.
parties disagree over the proper application of Labor Code
Section 204.086 to the facts of this case. The Section
governs the collection of taxes from "successor
employers" and provides:
An individual or employing unit that acquires the
organization, trade, or business or substantially all of the
assets of an organization, trade, or business of an employer
who, at the time of the acquisition is indebted to the
commission for a contribution, a penalty, or interest, is
liable to the ...