No.

05-L1-00036-CV

IN THE COURT OF APPEALS

FIFTH ruDICIAL DISTRICT OF TEXAS
DALLAS, TEXAS

EX PARTE: THE CITY OF IRVING, TEXAS

BRIEF OF APPELLEE THE CITY OF IRVING

Charles R. Anderson Michael L. Raiff

State Bar No. 01170500 State Bar No. 00784803
Office of the City Attorney Gibson, Dunn & Crutcher LLP
825 West Irving Boulevard 2100 McKinney Avenue
Irving, Texas 75060 Dallas, T){7520t-6912
972.721.2541 214.698.3350
97 2.7 2t .2750 (facsimile) 214.57 I .2927 (facsimile)
canders on @city ofiwing. org MRai ff@gib s ondunn. c om

Ray Hutchison
State Bar No. 10352000
Thomas S. Leatherbury
State BarNo.12095275
Robert R. Collins, III
State Bar No. 00792420
Julie M. Partain
State Bar No. 24032734
Marc A. Fuller
State BarNo.240322L0
Vrxsor{ & Errr¡¡s LLP
2001 Ross Ave., Suite 3700
Dallas, Texas 7 5201-297 5
2r4.220.7700
21 4.999 .7 7 92 (facsimile)
tleatherbury@vel aw. com
nnfuller@velaw.com

.A.ttorneys for Appellee The {Jíty of lwing

Orat Argument R equested

 TABLE OF CONTENTS

IDEI\TITY OF PARTIES AND COUNSEL 111

INDEX OF AUTHORITIES ......1v

STATEMENT OF THE CASE... 111

STATEMENT REGARDING ORAL ARGUMENT iv

ISSUES PRESENTED.... .V

STATEMENT OF FACTS I

I. The City's Entertainment and Hotel Project I

II. The Proposed Bonds ............. I

SUMMARY OF THE ARGUMENT....... I

ARGUMENT l1

I. The Tax Revenues Pledged by the City Are Not Subject to Biennial
Appropriation. 11

A The Texas Legislature Has Made Clear that Biennial Appropriation

Is Not Required for the Revenues at Issue in this Case T2

B The Revenues at Issue Are Not General Revenues. ................... 16

C The Attorney General Has Previously Approved Proposed Bonds

Secured by the Same Revenues, Without Suggesting that Biennial
Appropriation Is Required. ...... 18

il. The City Is Entitled to the State Mixed-Beverage Revenues 20

A. The Plain Meaning of "Governmental Body" Includes the State. ..............20

B. The Doctrines of Ejusdem Generís andNoscitur a Sociis Do Not

Require a Narrower Construction. 23

C. The Legislative History Supports a Broad Interpretation of

ii
 "Governmental Body." 26

D The Overall Structure of Chapter 2303 Does Not Support Limiting

"Governmental Body''to Local Governments Only. .................27

m. The Attorney General Has Waived Any Challenge to the Proposed Bonds. .........28

IV. The Opposing Intervenors' Appeal Is Improper and Without Merit. .. 29

A. The Court Should Dismiss the Opposing Intervenors' Appeal

and Not Consider Their Appellate Issues....... 30

B. The Court Has Already Rejected the Opposing Interyenors'

Argument that the Entertainment and Hotel Project Is Not a
Qualifuing "Hotel Project" Under Chapter 351 of the Texas
Tax Code, and There Is No Reason to Reverse that Holding. .........32

C. The Ordinances Imposing the Ticket and Parking Taxes Were

Properly Passed at a Special Meeting. 36

CONCLUSION AND PRAYER .................40

CERTIFICATE OF SERVICE 42

iii
 IDENTITY OF PARTIES AND COUNSEL
Appellant/Defendant Trial and Appellate Counsel

The Office of the Attorney General of David J. Schenck

Texas Deputy Attorney General for Legal
Counsel
David C. Mattax
Director of Defense Litigation
Jennifer S. Jackson
Assistant Attomey General
Financial Litigation Division
Office of the Attorney General of Texas
P.O. Box 12548
Austin, TX787lI-2548
5t2.936.1342
s12.936.0545 (fax)

Appellants/Defendants Trial and Appellate Counsel

Joe Putnam James B. Harris

Scott P. Stolley
Irving Taxpayers Opposed to Illegal and Richard B. Phillips, Jr.
Wasteful Use of Tax Money Thompson & Knight LLP
One Arts Plaza
l722Routh Street, Suite 1500
Dallas, TX7520l-2533
2r4.969.t700
214.969.1751 (fax)

111
Appellee/PlaintÍff Trial and Appellate Counsel

City of lrving, Texas Michael L. Raiff

Gibson, Dunn & Crutcher LLP
2100 McKinney Avenue
Dallas, TX7520I-6912
214.698.3350
214.571.2927 (fax)

E. Ray Hutchison
Thomas S. Leatherbury
Robert R. Collins III
Julie M. Partain
Marc A. Fuller
Vinson & Elkins LLP
2001 Ross Avenue, Suite 3700
Dallas, TX7520I
214.220.7700
214.999.7792 (fax)

Charles R. Anderson, City Attorney

Office of the City Auorney
825 West Irving Blvd.
Irving, TX 75060
972.721.2541
972.721.2750 (fax)

Other Intervenors

Las Colinas Group, LP Frank L. Branson

Eric T. Stahl
Law Offices of Frank L. Branson, P.C.
4514 Cole Avenue, Suite 1800
Dallas, TX75205
214.522.0200
2t4.521.5485 (fax)

iv
B Concessionaire-Las Colinas, LLC Mikel J. Bowers
Bell Nunnally &, Martin LLP
3232McKinney Avenue, Suite 1400
Dallas, TX75204-2429
214.740.1400
214.740.1499 (fax)

Greater Irving-Las Colinas Chamber of Robert D. Martinez

Commerce Cotton, Schmidt & Abbott, LLP
550 Bailey Avenue, Suite 600
Fort Worth,TX76I07
817.338.4s00
817.338.4599 (fax)

Dallas County Utility and Reclamation John F. Boyle, Jr.

District Boyle & Lowry, L.L.P.
4201 -Wingren, Suite 108
Irving, TX75062-2763
972.650-1700
972.650.1 701 (direct dial)
972.650.7105 (fax)

Pro Se Intervenors Thomas Blakewell

Steve Bronner
James W. Cassels
Cousins Properties Services LLC
Teresa E. Crow
Gables Residential
Hines Las Colinas L and LP
Irving Convention and Visitors Bureau
Carl Klinke
Jacky Knox
Clementine C. Lear
Danny Opitz
Nancy Optiz
Mel Robinson
Robert N. Stewart
Carlton E. Turner, Ph.D., D.SC.
Rob Witte

v
 INDEX OF AUTHORITIES

Cases

Albertson's, Inc. v. Sinclair,

984 S.W.2d 958 (Tex. 1999) 20

Buckholtz Indep. Sch. Díst. v. Glaser,

632 S.w.2d t46 (Tex. 1982) v

City of Bells v. Greater Texoma Util. Auth.,

790 S.W.2d 6 (Tex. App.-Dallas 1990, writ denied) 39

City of Houston v. Clark,

197 S.W.3 d 314 (Tex.2006) .......14

Columbia Med. Ctr. Of Las Colinas, Inc. v. Hogue,

271 S.w.3 d 238 (Tex. 2008) t4

Doyle v. State,
148 S.W.3d 611 (Tex. App.-Austin, 2004, pet. denied) 23

Estate of Pollackv. McMurrey,

858 S.IV.2d 388 (Tex. 1993)...... 28

Fírst Am. Title Ins. Co. v. Combs,

258 S.V/.3 d 627 (Tex. 2008) 37

Friedman v. Am. Surety Co. of New York,

1sl S.W.2d 570 (Tex. l94l) ......17

General Chem. Corp v. De Lø Lastra,

8s2 S.W.2d9l6 (Tex. 1993) ..............33

Helena Chem. Co. v. Wilkins,

47 S.W.3d 486 (Tex. 2001) t7

Humble Oil & Ref, Co. v. City of Georgetown,

428 S.W.2d 405 (Tex. Civ. App.-Austin 1968, no writ) 37

In re Estate of Nash,
220 S.w.3 d 9t4 (Tex. 2007) 23

Lower Colorado River Auth. v. Cíty of San Marcos,

523 S.w.2d64t (Tex. t97s) ..............39

1V
Maníon v. Lockhart,
I 14 S.w.2d216 (Tex. 1938) t7

Monsanto Co. v. Cornerstones Mun. Util. Dist.,

86s S.W.2d937 (Tex. 1993) 22

Office of Public Utility Counselv. Public Utílíty Comm'n of Tex.,

878 S.W.2d 598 (Tex. 1994) l8
Ohnesorge v. Winfree Academy Charter School,
328 S.W.3d654 (Tex. App.-Dallas 2010, no pet. h.) 34

Putnam v. City of lrvíng,

No. 05- I 0 -01269 -CV, 20 | I WL 25947 8 (Tex. App.-Dall as, 2011 ) ...... passlm

Smíth Cnty. v. Thornton,

726 S.W.2d 2 (Tex. 1986) 39

Smith v. Wortham,
157 S.W. 740 (Tex.l9l3) 24

Thomas v. State,
91 S.W.2d 716 (Tex. Crim. App. 1935) ..23

United States v. Mescall,

21s U.S. 26 (te0e) ..24

Statutes

Tpx. Ac. Cooe $ 41.052 ..2t

TBx. CoNST. art. Iil, $6 ll,12,13

TEX. ELEC. Cooe $ 251.001 2l
TBx. FrN. Coop $ 14.063 2t

TBx. FrN. CooB $ 16.010 2t

TBx. Gov'r CoDE $ 1205.021(2) 39

Tpx. Gov'r CoDE $ 1205.042 4

TBx. Gov'r CoDE $ 1205.063(a)(2) ....4

V
TBx. Gov'r ConB $ 2009.002 2l

TBx. Gov'r CorB ç 2252.091 24

TBx. Gov'r CoDE ç 2254.021(6).......... 24

Tex. Gov'r CoDs $ 2303.002.............. 26

Tpx. Gov'r CooE $ 311.011(a) 20

aa
TBx. Gov'r CoDp $ 311 .023(2) JJ

TBx. Gov'r CoDp $ 311 .026(a) ........ t4

TEx. Gov'r CoDE $ 33.030 2t

Tpx. Gov'r Conn $ 391.003......... 2t

TBx. Gov'r CoDE $ 401.011(g) 2l

Tpx. Gov'r Coon $ 436.053(b) 2t

Tex. Gov'r CooB $ 551.001(3) 2t

TBx. Gov'r Coos $ 559.001 2t

Tnx. Gov'r Coos ç 573.042.... 2t

Tex. Gov'r CooE $ 614.003.... 2t

Tsx. Gov'r Cors $ 659.002(c) 2l

Tex. Gov'r CooE $ 2303.502 26

TBx. Gov'r CoDE $ 2303.504 17,26

Tsx. HuNr. RBsouncBs Coor $ 115.004 2t

TBx. Spsc. Drsrnrcr ¡No Locar Laws CooB $ 8842.102(b) 2t

TBx.TexCooB$ 111.104 t7

v1
TBx. Tax Conp $ 151 .027(c)(7) ... ..,...,..,20

Tex. TnaNsp. CooB $ 456.001(2) 2t

TBx. Tn¡usp. Conp $ 458.001. 2t

TBx. Gov'r CooE $ 2303.5055 ..............passim

TEx. Gov'r Coop $ 552.003(1XA) 20

Tsx. Tnx CooB $ 151 .429(h) passlm

Tpx. T¡x CooB $ 351.102 passlm

Other Authorities

C.S.H.B. 2001,75'hLeg.,Reg. Sess., $ 7.... 25

IRVTNG, Tpx. CSaRTER, Art. IV, $ 17 . 36

OpnIcs oF THE Texas Arronxpv Gsupn¿l, OreN Mpernqcs HaNoeooK, at 65

(2008) 39

Tex. Atty Gen. Op. H-716 (1975) t2

vt1
 RECORD REFEREI'.{CES

In this brief, the following record citation forms will be used:

o Clerk's Record (Vols. 1-6) will be cited as "[volume]CR.[page]."

a Reporter's Record will be cited as "lRR.[page]," when referencing the transcript of

the trial on September 27,2010, and 3RR.[p&go]," when referencing the transcript of
the trial on October 4,2010.

o The City's trial exhibits will be cited as "PX[number]."

o The Opposing Intervenors' trial exhibits will be cited as "DX[number]."

 STATEMENT OF THE CASE
This is the third appeal arising out of a bond validation suit brought by the City of

Irving (the "City") under the Expedited Declaratory Judgment Act in Chapter 1205 of the

Texas Government Code (the "Act"). See TBx. Gov'T CoDE $ 1205, et seq. This appeal

is accelerated and takes priority over any other matter, other than writs of habeas co{pus,

pending in the appellate court. Tpx. Gov'r Coos g 1205.068(e).

To fund the construction of a major Entertainment and Hotel Project, the City

plans to issue three series of municipal bonds ("Proposed Bonds" or "Bonds"). On

September 2, 2010, the City filed a Petition under the Act to validate the Bonds. l CRl .

The City's Petition was ans'wered by the Off,rce of the Attorney General for the State of

Texas ("Attorney General"), which is a mandatory party to proceedings under the Act,

and two opposing intervenors-Joe Putnam and the Irving Taxpayers Opposed to Illegal

and Wasteful Use of Tax Money (collectively, "Opposing Intervenors"). Numerous other

intervenors appeared in support of the Petition.

In its Answer and during trial, the Attorney General repeatedly stated that it was

neutral in this case and did not take any position on the legality of the Proposed Bonds.

During the first day of trial, the Attomey General identified only one issue for the trial

coutt's consideration, which it has now abandoned-whether the City has presented

evidence to establish that the Entertainment and Hotel Project qualified as a "hotel
projecf'under Section 351.102(b) of the Texas Tax Code. Before the trial resumed for

the second day, the Attorney General submitted a Trial Brief, in which it raised two new

issues for the trial court's consideration-whether certain revenues pledged as security

111
for the Bonds were subject to biennial appropriation by the Texas Legislature and

whether the City was entitled to receive the State's portion of mixed beverage tax

revenues. The Attorney General's Trial Brief stated, however, that it was not taking a

position on either issue. But when the City moved for final judgment, the Attorney

General took the position that the Proposed Bonds could not be validated based on these

two issues. The trial court agreed with the City on both issues and entered Final

Judgment. The Attorney General filed this appeal.

In addition, the Opposing Intervenors, who were not parties when the Final
Judgment was signed, have also filed an appeal from the Final Judgment. Their appeal is

improper and should be dismissed. As the Court already held in the prior consolidated

appeals in this case, the Opposing Intervenors were properly dismissed from this case

because they failed to post a $10 million bond ordered by the trial court as a prerequisite

of their continued participation in this case. See Putnam v. City of lrving, No. 05-10-

0r269-Cv,2011 wL 259478 (Tex. App.-Dallas Jan. 27,2011, no pet. h.) (the "putnam

appeal" of ooPutnam").

STATEMENT REGARDING ORAL ARGUMENT

The City believes oral argument is unnecessary. Time is of the essence in

resolving this appeal. As the Court recognized in Putnam, "'the mere existence of the

suit acts as a temporary injunction"' against the issuance of the Proposed Bonds and the

completion of this voter-approved project. Id. at *2 (quoting Buckholtz Indep. Sch. Dist.

v. Glaser,632 S.W.2d 146, 149 (Tex. 1982)). The issues before the Court are discrete,

limited, and purely legal in nature. Nevertheless, should the Court determine that oral

1V
argument would aid its decisional process, the City preserves its right to participate by

requesting oral argument on the cover of its brief, as required by Texas Rule of Appellate

Procedure 39.7.

ISSUES PRESENTED

The Attorney General challenges only two discrete provisions of the Final

Judgment entered by the trial court in favor of the City. Specifically, the Attorney
General's appeal raises the following issues:

1. Did the trial court correctly hold that the City is entitled to the State Project

Taxes and the City's portion of the mixed beverage tax for a period of ten

years, as expressly provided by statute, without the need for these revenues to

be re-appropriated by the Texas Legislature on a biennial basis?

2. Did the trial court correctly hold that the State is a "governmental body''under
the plain meaning of Section 2303.5055 of the Texas Government Code and

that the City is therefore authorized to receive the State's portion of the mixed

beverage tax?

In addition, the Opposing Intervenors have improperly attempted to participate in

this appeal, even though this Court has already held that they were properly dismissed

from this case for failing to post the bond required under the Expedited Declaratory

Judgment Act. The Court should disregard their arguments and dismiss them from this

appeal. If the Court does consider their arguments, then it will need to decide the

following two additional issues:

V
 1. Did this Court correctly hold in Putnam that the Entertainment and Hotel

Project is a "hotel project" within the meaning of Section 351.102(b) of the Texas Tax

Code?

2. Did the trial court correctly hold that the City Council properly passed the

ordinances levying the Admission Tax and Parking Tax at a "special" meeting? If not,

did this Court correctly hold in Putnam that any alleged violation will be cured when the

City Council votes to re-levy those taxes at a "regular" meeting?

v1
 STATEMENT OF FACTS
I. THN Crry'S ENTnnTAINMENT ¡No Hornr, Pno¡pcr

The City of Irving is in the middle of a large, multi-phase project to build a

convention and entertainment destination in Las Colinas. The first phase of the project

included the construction of a new $135 million Convention Center. 1RR.100. To

enhance the new Convention Center and distinguish it from competing venues, the City is

in the process of designing and planning an Entertainment and Hotel Project, which will

be built immediately adjacent to the Convention Center. 1RR.109. The Entertainment

and Hotel Project will be connected to the Convention Center by a pedestrian walkway,

promoting easy access to and from each facility. 1RR.108-09, 133. The Entertainment

and Hotel Project will include various interrelated facilities, including a boutique hotel,

performance hall, restaurants, open air plazas, outdoor stages, promenades, and parking

facilities. lRR. 108-09.

il. Tuo PnoposED BoNus

The City has already issued bonds and expended funds in the amount of $25

million to pay for the initial design and planning of the Entertainment and Hotel Project,

and the City is ready to move forward with construction. 1RR.97, 104-05. To finance

this construction, the City intends to issue three series of bonds (Series 20104, 20108

I
and 2010C)r in a total amount not to exceed $200 million in net proceeds. 1RR.121.

These Bonds may be secured by pledges of various revenues, including:

o State Project Taxes. Once the Project is operating, the businesses within

the Project will begin collecting støte sales and use tuxes and støte mixed

beverøge tqxes. 1RR.130. Additionally, a støte hotel occupøncy tux wiII

be collected from the Project's boutique hotel. lRR.130. These taxes are

levied by the State and collected from within the Project. lRR.l30, 136.

. City Project Taxes. The City also levies its own one percent (I%) søles

and use tax, and that tax will be collected from within the Project and

pledged to the Bonds. IRR.136. Similarly, the City will pledge its portion

of the mixed beverage tøx. 1RR.136. As background, the State imposes a

l4o/o mixed beverage tax, but the State remits a portion of that tax
(10.7143% of the I4o/o tax) to the City. 1RR.137. Thus, the City receives

from the State a portion of the state mixed beverage tax. lRR.l37.

o 7o/o City Hotel Occupancy Tax. The City also intends to pledge a city-

wide 7o/o hotel occupancy tax it has levied on stays at hotels within the City

(,,7o/o HOT").

1
If issued this year, these Bonds will be Series 20l1A,2OlIF., and 201lC.

2
 o Rent Payments. The City anticipates receiving rent payments from its

tenant at the Project, the Las Colinas Partnership (or any successor or

assigns). 1RR.141.

o Parking Tax. The City has levied a tax of $3.00 on each motor vehicle

parking in a parking facility of the Entertainment and Hotel Project.

lRR.138-39;PX23. The tax is also levied on an additional 2400 parking

spaces adjacent to the Entertainment and Hotel Project, pursuant to a

parking lease agreement with the owner of those parking spaces. lRR.l40;

PX24.

o Admission Tax. The City has levied a l0% tax on the price of admission

to events held at the Entertainment and Hotel Project. lRR.140-41; PX25.

o 2o/o EV HOT. The City has levied an additional2o/o tax on the occupancy

of a room in hotels located within the City ("ZyoEV HOT";.2 tnn.tZl.

UI. TrrB PnocEEDINGS Bpr,ow

The Attorney General suggests in its Brief that the City was forced to seek judicial

validation of the Bonds because the Attorney General had reviewed them and concluded

that they contained incurable legal defects. See AG Br. at 3. This suggestion is

2
The Parking Tax, Admission Tax, and 2% EV HOT were levied pursuant to Chapter 334 of the Texas
Local Government Code, commonly called the "Brimer Bill." As required by the Brimer Bill, the City
held an election in November 2007 (the "2007 Election) to obtain voter approval for these special
Brimer taxes. 1RR.95-96; PX9. The proposition passed overwhelmingly. Id. Following that election,
the City Council levied the 2o/o HOT in 2008 and levied the Parking and Admission taxes on August 25,
2070. See PX20; PX23: lRR. 129, 139, l4l.

3
inaccurate and shameful. There is no evidence in the record to support any such

suggestion. Indeed, as demonstrated below, the Attorney General originally stated in the

trial court that it had no objection to the Bonds. It was not until the eve of final judgment

that the Attorney General first opposed the Bonds

The City filed its Petition on September 2,2010. lCRl. As required under the

Act, the City served the Petition on the Attorney General, which is a mandatory party to a

proceeding under the Expedited Declaratory Judgment Act. Tgx. Gov'T CODE $

1205.042. Under the Act, the Attorney General was required to review the Petition.

Tpx. Gov'T CoDE $ 1205.063(aX2). If, based on that review, the Attorney General

"believefd] that...the public securities are...or will be invalid or unauthonzed'it was

required to say so in its Answer and raise all appropriate defenses to the relief requested

in the Petition. /d. Here, the Attorney General's Answer did not raise any defenses and

did not deny that the Bonds were valid and authorized. Instead, the Attorney General

took a neutral position:

The Attorney General neíther ødmits nor deníes the

allegations made by Petitioner The City of Irving, but
respectfully requests that this Honorable Court require the
allegations of the Petition be properly proven. . . . .

Upon proper proof being møde by Petitioner hercin of the

allegations contained in the Petition, the Attorney General
will have no obiectíon to the relief requested by Petitíoner
being granted by this Court[.]

3CR.487 (emphasis added)

4
 As required under the Act, the trial court called the case to trial on September 27,

2010. 3CR485. At trial, the Attorney General repeatedly confirmed its neutral position.

In his opening remarks to the trial court, counsel for the Attorney General stated:

Well, with respect to the Attorney General's Office, thÍs is a

situation where because of basically the somewhat novel
argument that we haven't addressed before, ute're legølly not
tøking ø posítíon on the fundamentøl íssue that's been
røísed, which ís whether or not Sectíon 351 øpplíes to thís
situation.

Sometimes in these matters, people come to the Attorney

General's Office for our approval of these bonds and then go
to Court to get the positions validated. In other cases, such as
this one, they go directly to the Court and get the issue
validated. So wíth respect to the fundømentøl legøl ßsues, I
suppose the best posítíon for us to tølk about ís that we're
fund øm e ntølly n e utral.
Obviously, depending on what the final Resolution is and
what the terms of any order are, we would have commentary
on the order to make sure it comports with the way we view
things. On the fundømentøl íssue beþre the Court, we øre
neutral todøy.

lRR.8 (emphasis added). Of course, the "fundamental issue" that the Attorney General

repeatedly referred to at trial is an issue that the Attorney General has not raised in this

appeal-whether the Entertainment and Hotel Project is a "hotel project" under

Chapter 351 of the Texas Tax Code. Id. According to the Attorney General, that issue

required the presentation of evidence relating to the boutique hotel and its relationship to

the other facilities within the Project and, then, a legal determination regarding whether

such a project qualif,red as a "hotel project" under Section 351.102(b) of the Texas Tax

Code. 1RR.24. The Attorney General does not dispute that the City properly proved at

5
trial that the Entertainment and Hotel Project is a "hotel project" under Section

351.102(b) of the Texas Tax Code.3 The Attorney General did not otherwise present any

evidence, examine any witnesses, or make any argument in opposition to the Bonds

during the trial.

On October 1, 2010, the Attorney General submitted a Trial Brief, in which it

asserted for the first time that, in addition to the "hotel project" issue, the trial court
would need to determine whether the State's share of the mixed beverage taxes collected

within the Project may be paid to the City and whether all of the State Project Taxes are

subject to biennial appropriation by the Texas Legislature. 3CR.662-64. Significantly,

even at this late date, the Attorney General stated in the Brief that it "t[ook] no position"

on these issues. 3CR.662.

For the next two months, the proceedings focused on the City's motion for a

security bond against the Opposing Intervenors. After conducting a hearing on that

motion on October 4, 2010, the trial court ordered the Opposing Intervenors to post a

510 million bond. See Putnam,2011 WL 259478 at*2. When the Opposing Intervenors

failed to post the required bond, they were dismissed from the case. See id. The

Opposing Intervenors then appealed the trial court's order imposing the bond and its

order dismissing them from the case. See íd. The Court affirmed both orders on

December 13, 2010. See Dec. 13, 2010 Op. in No. 05-10-01269-CV. The Court

3
As discussed below, the "hotel project" issue was resolved by this Court in Putnam and has not been
raised by the Attorney General in this appeal. See Putnam,2017 WL259478 at*3-6.

6
subsequently modified its opinion and denied the Opposing Intervenors' request for

rehearing and reconsideration en banc. See Jan.27,20Il Op. in No. 05-10-012 69-CV.4

Two days later, the remaining parties in the case-the City and the Attorney

General-filed separate motions for entry of final judgment. 6CR.126l (City's Motion);

6CRl277-80 (AG's Motion). For the most part, the City and the Attorney General

agreed on the appropriate relief. The Attorney General did not, for example, dispute that

the Entertainment and Hotel Project was a qualifying "hotel project" under Section

351.102(b)oftheTexasTaxCode. But,forthefirsttíme,theAttorneyGeneraltookthe

position with the trial court that the City was not entitled to the State's portion of the

mixed beverage tax and that the State Project Taxes were subject to biennial
appropriation by the Texas Legislature. Until then, as discussed above, the Attorney

General had repeatedly stated that it was "neutral" regarding the Proposed Bonds and,

specifically,Ihat it "t[ook] no position" on the mixed beverage and biennial appropriation

issues.

After considering the City's and the Attorney General's arguments on these two

issues, the trial court agreed with the City and entered the City's proposed Final

Judgment. 6CR.I28l-87. On January 31,2011, at the request of the Attorney General,

the trial court entered Findings of Fact and Conclusions of Law. 6CR.1313-15. The trial

court held that the term o'governmental body" in Section 2303.5055(a) of the Texas
a
Unless otherwise stated, all references in this brief to the opinion by the Court in the prior consolidated
appeals in this case will be to the Jatuaryz7,2011 opinion, which modified and superseded the
December 13, 2010 opinion. See Putnam, 20ll WL 259478.

7
Govemment Code is unambiguous, noting that it "has been used repeatedly throughout

Texas' statutes" to refer both to local and state bodies. 6CR.l3l4. The trial court further

held that the Attorney General's proposed construction would conflict with the Code

Construction Act, TBx. Gov'T CoDE $ 3l1.005(13), under which "including" is a term of

enlargement. Id. The trial court also held that legislative history and the general

structure of Chapter 2303 of the Texas Government Code support the plain meaning of

the term. 6CR.1314-15. In addition, the trial court held that none of the pledged

revenues were subject to biennial appropriation. 6CR.1315.

SUMMARY OF THE ARGUMENT

.When
the Attorney General first appeared in this case, it took a "neutral" position

on the legality of the Proposed Bonds. The Attorney General told the trial court that its

only objective was to ensure that the City put on evidence to establish that the

Entertainment and Hotel Project qualified as a'ohotel project" under Section 351.102(b)

of the Texas Tax Code. If the trial court determined that the City had met its burden, the

Attorney General stated that it would have "no objection" to the relief requested by the

City in its Petition.

For whatever reason, the Attorney General now attempts to disavow its professed

neutrality. Of course, the "hotel project" issue has already been resolved by this Court in

the City's favor. But the Attorney General now raises two separate, additional issues,

taking the position that the trial court's Final Judgment should be modified to (1)

condition the City's entitlement to the State Project Taxes and the City's portion of the

8
mixed beverage tax on biennial appropriation by the Legislature and (2) deny the City the

State's portion of the mixed beverage tax altogether.

Neither of these objections convinced the trial court, and they should not convince

this Court, either. It is inconceivable that the Legislature intended for these tax revenues

to be subject to biennial appropriation, given that the statutes provide that the City is

entitled to the tax revenues for ø period of ten yeørsr so that it can pledge them as

security for bonds. A pledge of a ten-year revenue stream would be meaningless and

ineffective as security if the revenues were subject to the whims of the Legislature and

Governor every two years. Rather, the statutes clearly treat these specific tax revenues

differently from general revenues held by the State for any purpose. Unlike general

revenues, these specific tax revenues are held by the State for the benefit of the City-in
essence, a trust. This is how the State Comptroller administers these revenues, without

biennial appropriation from the Texas Legislature, and it is also consistent with the
Attorney General's approval of other cities' bond issuances. Indeed, the Attorney

General has repeatedly approved other cities' "hotel project" bonds, secured by the same

tax revenues, without ever suggesting that these pledges aÍe subject to biennial

appropriation.

The Attorney General's attempt to deny the City the State's portion of the mixed

beverage taxes collected in the Project area is also without legal basis. Section

2303.5055 of the Texas Government Code states that any "govefimental body" may

provide such a rebate. The plain meaning of the term "governmental body" includes both

local and state governmental bodies, and the Attorney General's attempt to limit the term

9
to "local" govemmental bodies is inconsistent with this plain meaning. Even if the term

were ambiguous, the Attorney General's misplaced reliance on the doctrines of ejusdem

generis and noscitur a sociís, its selective reading of legislative history, and its
misleading description of the'ostructure" of Chapter 2303 should all be rejected.

And that should end this appeal. There is no reason for the Court to consider the

additional arguments of the Opposing Intervenors. They have been dismissed from this

case, and this Court has upheld that dismissal. Moreover, their arguments here are of no

consequence. The Court flatly rejected the Opposing Intervenors' argument that the

"hotel project" is a sham and not areal "hotel project" under Section 351.102(b) of the

Texas Tax Code in the prior consolidated appeal, and there has been no additional

evidence presented and no change in law that would justify a departure from that holding

Moreover, their argument that the entire Final Judgment must be reversed and vacated

because of a potential procedural violation by the City Council in formally levying two

voter-approved taxes at a "special" meeting instead of a "regular" meeting is also

inconsistent with this Court's prior holding. First, there was no procedural violation; the

ordinances levying these taxes were properly passed at a "special" meeting. But even if
the Opposing Intervenors are coffect on this point of order, the Court has already

correctly held that any alleged violation can easily be remedied by re-levying the voter-

approved taxes at alater "regular" meeting.

10
 ARGUMENT

I Tnn Tnx Rnvrnuns Pr,nucnD By rnn Crry AnB Nor Sun¡ncr ro BrnNNrnr,
AppnopnrarroN.

The Attorney General argues that the City's entitlement to several of the pledged

tax revenues is subject to biennial appropriation by the Texas Legislature. The Attorney

General bases this argument on Article VIII, Section 6 of the Texas Constitution, which

provides as follows:

No money shall be drawn from the Treasury but in pursuance

of specific appropriations made by law; nor shall arry
appropriation of money be made for ø longer term thøn two
years.

Tex. CoNST. art. V[I, $ 6 (emphasis added). This is a new position for the Attorney
General. The Attorney General has historically approved bonds secured by many of the

same tax revenues, without any requirement that the funds be re-appropriated on a

biennial basis or requiring a statement in the bond documents that such funds are subject

to biennial appropriation. Indeed, the economic development statutes on which the City

relies here for its pledge would make no sense if re-appropriation were required every

two years, as the statutes expressly provide that the revenues may be pledgedfor a períod

of ten yeurs. Moreover, any suggestion that these revenues are akin to general revenues,

which are deposited in the State's general fund for unspecified purposes, is inaccurate.

The tax revenues at issue here are specifically monitored and separately accounted for

from the moment of their collection, so that they may be paid according to the applicable

provisions of the Tax Code and Government Code. In effect, the Legislature has

l1
provided that, to the extent these earmarked funds are ever held by the State, they are

held in trust for the benefit of the City.

A. The Texas Legislature Has Made Clear that Biennial Appropriation

Is Not Required for the Revenues at Issue in this Case.

The biennial appropriation requirement set forth in Article VIII, Section 6 is not

absolute. Rather, it is subject to other provisions of the Constitution. Tex. Atty Gen. Op

H-716 (1975). In 1987, Texas voters amended the Constitution by adopting Article III,

Section 52-a, which provides:

Notwíthstønding øny other provísíon of thís constítution, the

legislature may provide for the creation of programs and the
making of loans and grants of public money...for the public
pulposes of development and diversification of the economy
of the state, the elimination of unemployrnent or
underemployment...or the development or expansion of
transportation or commerce in the state....

This provision permits the Legislature to carve out exceptions to Article VIII, Section 6,

by establishing an economic development program in which it grants powers to state and

local governmental bodies that may be inconsistent with the requirement of biennial

appropriation.

The adoption of Section 151.429(h) of the Tax Code, Section 2303.5055 of the

Government Code, and the amendment to Section 351.102(c) of the Tax Code, clearly

reflect the Legislature's intent to enact such an economic development program for hotel

projects. In fact, Chapter 2303 of the Government Code is titled "ECONOMIC

DEVELOPMENT PROGRAMS INVOLVING BOTH STATE AND LOCAL

T2
GOVERNMENTS."5 This chapter was added in 1993, after Section 52-a was passed.

Accordingly, the express purpose of the statutes on which the City relies is to provide for

economic development programs that are not subject to biennial appropriation.

Having provided for economic development programs, the Legislature was free

under Section 52-a to appropriate funds without being restricted by any biennial

appropriation requirements. Accordingly, the Legislature here expressly provided that

the City is entitled to receive the State Project taxes and the City's portion of the state

mixed beverage tax for ø period of ten yeørs. See, e.g., TEX. Tex Conp $ 151 .429(h)

(state sales and use taxes and state hotel occupancy taxes shall be refunded to owner of

hotel project for "first l0 years after such qualified hotel project is open"); TBx. Gov'r

Coop $ 2303.5055 (governmental body may agree to rebate, refund, or pay mixed

beverage taxes and hotel occupancy tax for 10 years). If the Legislature did not intend

t In addition, Section 2303.002

of the Government Code, specifically provides that "[t]he purposes of this
chapter are to establish a process that clearly identifies severely distressed areas ofthe state and provides
incentives by støte and local government to induce private investment in those areas by removing
unnecessary govemmental regulatory barriers to economic growth and to provide tax incentives ønd
economic development progrøm benefits." TEX. Gov'T Coon $ 2303.002 (emphasis added). The origin
of Chapter 2303 was Article 5190.7, Texas Revised Civil Statutes. Chapter 2303 was added to Article
5190.7 and then recodified in the same session. Although Article 5190.7 was repealed when it was
codified into Section 2303.5055 of the Texas Government Code, the legislative findings provide that the
purpose of the legislation was to induce the investment of private resources in productive business
enterprises located in severally distressed areas . . . through this Act the state seeks to provide appropriate
investments, tax benefits and regulatory relief to encourage the business community to commit its
financial participation" and "to provide incentives by both state and local governments to induce private
investment . . . by means of the removal of the unnecessary governmental regulatory barriers to economic
growth and the provisions of tax incentives and economíc development program beneftts." ,See V.T.C.S
art. 5190.7 $2(a)-(c) (Repealed 1993) (emphasis added). Section 151.429 was also added at the same
time and in the same legislation that added 2303.5055. Notably, that section is entitled "Tax Refunds for
Enterprise Projects"-also clearly reflecting the economic development basis of Section 151.429(h) with
respect to "qualified hotel projects."

13
itself to be enacting these statutes pursuant to Section 52-a, it would not have provided

for a ten-year øppropriøtíon of revenues in support of these economic development

programs.

Indeed, the Attorney General's reading of these statutes could render certain

provisions of them unconstitutional and meaningless. See City of Houston v. Clark, 197

S.W.3d 314, 320 (Tex. 2006) ("When faced with multiple constructions of a statute, we

must interpret the statutory language in a manner that renders it constitutional if it is

possible to do so."); Columbia Med. Ctr. Of Las Colinas, Inc. v. Hogue,271 S.W.3d238,

256 (Tex. 2008) (court must "avoid[] any construction that would render a provision

meaningless"); Tex. Gov'T Coon $ 311.026(a) (providing that one statutory provision

should not be interpreted to render another meaningless). For example, if the programs

created under these statutes are not economic development programs under Section 52-a,

then certain of their key provisions could be unconstitutional. Prior to 1987, when

Section 52-a was enacted, the Texas Constitution prohibited any grant of public funds to

a private entity. See Tpx. CoNsr. art. III $ 52-b. Section 52-a cawes out an exception to

this rule, but only for economic development programs. Here, for example, Section

151.429(h) of the Texas Tax Code provides that "the owner of a qualified hotel project"

shall receive the applicable tax revenues-whether the owner is a city or a private entity.

While the City will be the owner of this particular "qualified hotel project," private

entities can be entitled to public refunds under Section I5I.429(h), as a Section 52-a

exception to the general prohibition against providing public funds to a private entity.

I4
But, under the Attorney General's reading of Section 52-a, such an affangement could be

rendered unconstitutional, even though it is clearly anticipated by the statute.

Moreover, the statutes do not just appropriate the revenues for a period of ten

years, they expressly permit these ten-year revenue streams to be pledged to the

repa)¡ment of bonds. See Tex. T¡x CooE $ 351.102(c) (a municipality is entitled to

receive funds under Section I51.429(h) of the Texas Tax Code and Section 2303.5055 of
the Government Code and pledge those funds for the payment of bonds). According to

the Attorney General's proposed construction, however, such a pledge would be

unconstitutional. See AG Br. at 16. In addition, the Attorney General's interpretation

would render pledges under these statutes meaningless and ineffective as security for the

bonds, if their pa¡rment were subject to re-appropriation by the Legislature every two

years. A city does not "pledge" revenues it does not know it will receive. Bond markets

demand certainty regarding which revenues will be "pledged," not just the expressed
hope of the bond issuers that funds might be available to repay the obligations. This

would fundamentally undermine the purpose of the statutes-to create economic

15
development programs and projects-by undermining municipalities' ability to rely on

bond financing to fund those programs and projects.6

B. The Revenues at Issue Are Not General Revenues.

The Attorney General's argument on this point also mischaracterizes the revenues

at issue here, suggesting incorrectly that they are treated no differently from general

revenues. In fact, the funds at issue in this case are reserved by statute for expenditure on

qualifying development projects, not for general purposes. For example, under Section

351.102(c) of the Tax Code, not only is the City "entítled to receive" the tax revenues

generated from within its hotel project, but it is specifically entitled to "pledge [those]
funds for the payment of [bonds] obligations." Administratively, the State recognizes

that these specific tax revenues are treated differently from general revenues. Indeed, in

administering the "refunds" provided for under Section 351.102(c) and Section

151.429(h) of the Texas Tax Code, the State Comptroller ensures that the tax revenues

are properly accounted for from the moment of theír collectíon, so that they may be
refunded to the project's owner as provided under the statutes. For example, taxpayers

within the project are required by the State Comptroller to fiIl out a form that will be used

6
In addition, the requirement of a bier¡rial appropriation would lead to strange results. For example, if a
transaction commences and is ready to close in the first quarter of an even-numbered year and is
dependent on the state taxes as a part of the security, the transaction would have to be put on hold through
the first eight months of the following odd-numbered year before it could be determined that the
Legislature would appropriate the money for the two following years and that the Governor would not
veto it. Similarly, if the transaction is ready to close in the fourth month of an odd-numbered year, only
one month would be left for the Legislature to act and the Governor to sign it. The Legislature could
never have intended such a result.

t6
"for the purposes of monítoríng the receípt of certøín Sales and (Jse taxes ønd Hotel

Occupøncy tøxes to whích the City ís entítled to receíve ín øccordønce wíth the

provísíons of Sectíons 351.102(c) ønd 151.429(h) of the Texas Tøx Code." See

Appendix Tab A (emphasis added).7 Similarly, the State Comptroller's website suggests

that the City's portion of the mixed beverage tax is not deposited as general revenues into

the General Revenue Fund:

By law, all mixed beverage and private club permit holders

remit to the State Comptroller a l4o/o gross receipts tax on
their mixed beverage sales each month. Following the end of
each calendar quarter, 10.71430/o of the tax paid is allocated
to the county where each business is located. For any business
located within an incorporated city, another 10.7143o/o of the
tax paid is allocated to the city where it is Iocated. The
remaining tax ís distributed to the Støte's Generøl Revenue
Fund.

https://ourcpa.cpa.state.tx.us/allocation/MixBevjsp (last visited March 12, 20ll); see

Appendix Tab 8.8

Accordingly, even to the extent that these funds may be transmitted to the State

Treasurer for some temporary period, the funds are only being held for the benefit of the

City, and the State treats them that way. Such aî arrangement does not run afoul of the

Texas Constitution. There is a commonsense distinction between funds paid to the State

t The City respectfully requests that

the Court take judicial notice of this Comptroller forrn. See Jones v.
City of Stephenville,96 S.W.2d 574, 576 (Tex. App.-Eastland 1995, no writ) (court could take judicial
notice of agency handbook).
8
The City respectfully requests that the Court take judicial notice of this publicly-available information
appearing on the Comptroller's website. See Oliphant Fin. L.L.C. v. Hill,310 S.W.3d 76, 76 n.2 (Tex.
App.-El Paso 2010, pet. filed).

l7
for the State's general benefit and those that are specifically held by the State for the

benefit of another.e And Article VIII, Section 6 of the Constitution only applies to the

former. See Fríedman v. Am. Surety Co. of New York, l5l S.W.2d 570,578-80 (Tex.

I94l) (holding that Unemployment Compensation Act "fund is not the property of the

State as such, and never goes into the State Treasury''); Manion v. Lockhart, lI4 S.W.2d
216,218 (Tex. 1938) (funds paid to State Treasurer by estate administrator not subject to

appropriation because intent was for the State to hold funds as trustee or custodian); see

also Tex. Atty Gen. Op. H-138 (finding that both Friedman and Manion involved money

which was held by the treasurer for possible or ultimate distribution to an identifiable

group ofpeople).

C The Attorney General Has Previously Approved Proposed Bonds

Secured by the Same Revenues, Without Suggesting that Biennial
Appropriation Is Required.

In addition to being at odds with the clear purpose and intent of the statutes
permitting the City to pledge these revenues for a period of ten years, the Attorney

General's position is at odds with its own prior opinions. The City of Irving is not the

first municipality to propose bonds for a hotel project under Chapter 351 of the Tax

e
Indeed, the Legislature has enacted specific provisions in the Government Code and the Tax Code that
more specifically direct that particular tax collections should be held for pwposes other than to augment
the state's general fund. See TBx. Gov'T Coon ç 2303.504. The Tax Code itself contains dozens of
provisions for a "refund" of taxes under specified conditions. SeeTBx. TAX CoDE $ 111.104. The
Attorney General's position on biennial appropriation would unnecessarily force such specific "Tax
refund" statutes into conflict with the general "tax collection" statutes. See Helena Chem. Co. v. Wilkins,
47 S.W.3d 486, 493 (Tex. 2001) (noting fundamental rule that statutes should be interpreted
harmoniously).

18
Code. In fact, during the last ten years, the cities of Houston, San Antonio, and Dallas

have all issued bonds secured by the many of the same revenues as the State Project

Taxes.to The Attorney General reviewed and approved these bonds, under the same

process it describes in its Brief. See AG Br. at l-3. The Attorney General did not take

the position that the tax revenues were subject to appropriation.

Indeed, the Attorney General opinions approving these other cities' bonds

expressly state that the bonds have been issued "in accordance with law" and are "valid

and binding." Under Section 1371.057(b) of the Texas Government Code, the Attorney

General must consider constitutional provisions in its review of proposed bonds. The

Attorney General's current position is in direct opposition to the opinions it previously

issued for bonds containing a pledge of the same revenues at issue here. Significantly,

those bonds contained no language in the bond documents limiting the pledge of these

revenues or stating that they are "subject to appropriation." Moreover, the Comptroller

has been paying these revenues to the other cities without any additional appropriation.

If the Attorney General's new position were accepted as law, it could adversely affect
these bonds in the market and compromise the State's credibility.

t0
Highlighted excerpts of the relevant bond documents and the Attomey General's opinions approving
the bonds are attached in the Appendix as follows: City of Houston (Tabs C-l and C-2); San Antonio
(Tabs D-l andD-2); and Dallas (Tabs E-l and E-2). The City respectfully requests that the Court take
judicial notice of these public documents. See Office of Public Utility Counsel v. Public Utility Comm'n
of Tex., 878 S.W.2d 598, 600 (Tex. 1994) (holding that a court may take judicial notice of agency order
for first time on appeal).

t9
 In short, whatever caused the Attorney General's change in position, it should be

rejected as bad law and bad policy.

II. Tnp crrv Is ENTTTLED To rHE sTATa Mrxro-Brcvrnacn RnvaNuns.

The Attorney General's argument that the City may not receive the State's portion

of the mixed beverage tax presents an issue of pure statutory interpretation. The

provision at issue, Section 2303.5055 of the Texas Government Code, allows for any

"governmentøl body" to "rebate, refund, or pay'' such revenues to the owner of a

qualified hotel project (here, the City). The question, therefore, is whether the State and

its agencies (such as the Comptroller) are "govemmental bodies." They clearly are. The

term "governmental body" has a plain meaning, which includes both state and local

government entities. In the trial court, the Attorney General argued that the doctrine of
ejusdem generis may justify a departure from this plain meaning. 3CR.663. Now, on

appeal, the Attorney General makes additional arguments based on its selective reading

of the legislative history and the "structure" of Chapter 2303 of the Texas Government

Code. As discussed below, none of these arguments requires this Court to ignore the

plain meaning of the term "governmental body."

A. The Plain Meaning of '6Governmental Body" Includes the State.

As the Texas Supreme Court has recognized, statutory interpretation begins with

the plain language of the statute:

In construing a statute, our objective is to determine and give effect to the

Legislature's intent. V/e accomplish that pu{pose, first, by looking to the statute's
plain and common meaning.

20
Albertson's, fnc. v. Sinclair, 984 S.W.2d 958, 960 (Tex. 1999) (per curiam) (citations

omitted). Similarly, the Legislature has instructed courts to construe words and phrases

"according to the rules of grammar and common usage." TBx. Gov't Con¡ $

311.011(a). Here, the common meaning and usage of the term "governmental body'' is

clear, and it includes both state and local govemment entities. Under Texas law, this

ends the inquiry. Because the State and its agencies are clearly "governmental bodies,"

Section 2303.5055 applies to them.

Indeed, a review of Texas statutes, including the Tax Code and the Government

Code, demonstrates that the term "governmental body'' is not understood by the

Legislature to be inherently limited to local or state entities. For example, Section

552.003(1)(A) of the Texas Government Code defines "governmental body'' to include

both "(i) a board, commission, department, committee, institution, agency, or office that

is within or is created by the executive or legislative branch of state government and, that

is directed by one or more elected or appointed memb ers" and "(iii) a munícipøl
governing body in the state." Tpx. Gov't CooE $ 552.003(1XA) (emphasis added).

And the Texas Tax Code incorporates that definition of o'governmental body." TEX. TAx

Coon $ 151.027(c)(7). Similarly, in other state legislation, the term "governmental

2t
body" is used as a generic term, which does not specify either "local" or "state" bodies.ll

Indeed, when the Legislature has wanted to limit a statute to either "local" or o'state"

goveÍlmental bodies, it has done so by expressly referring to either a "local governmental

body" or "state governmental body," instead of relying on the generic, broader term.rz

Here, the Legislafure could have easily used the narrower term "local governmental

body'' in Section 2303.5055 if that had been its intent. It did not, and its actual use of the

t' See, e.g., TEx. Ac. CooE

$ 41.052 (making commodity producers boards "state agencies," and
declaring that these state agencies are "govemmental bodies" for purposes of Public Information Act and
Open Meetings Act); TEx. FlN. Coon $ 14.063 (State's Office of Consumer Credit Commissioner is a
"governmental body"); Tgx. FtN. Coo¡ $ 16.010 (Texas Department of Banking and other state financial
agencies are "governmental bodies"); TEX. Gov'T Coon $ 33.030 (ensuring that State Commission on
Judicial Conduct is entitled to cooperation of any "state or local govemment body or department"); Tnx.
Gov'T Coop $a01.011(g) (inaugural committee for Govemor and Lieutenant Govemor is a
"govenmental body"); TEX. Gov'T Coon $ 436.053(b) (Texas Military Preparedness Commission is a
"governmental body"); TEX. Gov'T Coon $ 551.001(3) (Public Information AcÐ (defining
o'governmental
body" to include "(A) a board, commission, department, committee, or agency within thè
executive or legislative branch of state government that is directed by one or more elected or appointed
members"); TBx. Gov't CooE ç 573.042 (anti-nepotism rules apply to any "governmental bódy" to
which a Texas "candidate," as defined by Tex. EI-Bc. Cooe $ 251.001, may seek election, e.g., the
Comptroller); TEX. Gov'T Cooe $ 614.003 (peace officers are entitled to "legislative leave to serve in,
appear before, or petition a governmental body during a regular or special session of the body," which
includes leave to appear before the United States Congress (Sec. 61a.009)); Tpx. Gov'T CoDE
$ 2009.002 (directing all "govenrmental bodies" in the State, including State agencies, to develop
alternative dispute resolution procedures); Trx. Hurr¡. RnsouRCES CopB $ 1i5.004 (Governoris
Committee on People with Disabilities is a "governmental body"); Tex. Spec. DIsrrucr AND LocAL
LAws Coo¡ $ 8842.102(b) (allowing groundwater district to "contract with a state agency or another
governmental body"); see also TEX. Gov'T Coon $ 2252.091 ("'governmental entity' means a state
agency or a political subdivision of the state").

" See, e.g,,TEX.Eouc. CooB $ 62.003(2) (noting that the board of regents of a state university is a'ostate
governmental body"); Tex. Gov't Cooe $ 391.003 (requiring support of "locally elected governmental
body"); TEX. Gov'T Cooe $ 559.001 (defining "state govemmental body" as "a govemmental body as
defined by Section 552.003 that is part of state government"); TEX. Gov'T Cooe g 659.002(c)
(authorizing Comptroller to determine the priority of deductions for compensation paid by a "state
govemmental body"); TEX. TRANSP. CODE $ 456.001(2) (noting that a "designated recipient" of highway
funds can include "a local govemmental body"); TEX. TRANSI. CoDE $ 453.001 (defining "urban transit
districts" as a "local govemmental body ... that operates a public transportation system" in high
population areas).

22
broader, generic term should be dispositive of this issue. Monsanto Co. v. Cornerstones

Mun. Util. Dist.,865 S.W.2d937,939 (Tex. 1993).

The Attorney General fails to identify a single Texas statute in which the term

"governmental body" refers solely to a local governmental body, without expressly

saying so. Rather, the Attorney General relies on the factthal Texas statutes, including

Chapter 2303 of the Texas Government Code, sometimes expressly refer to the

"governing body of ø munícípølíty." See AG Br. at 19-20. The Attorney General then

attempts to argue that the unmodified term "governmental body" therefore either

inherently means "local governmental body'' ot, at least, is ambiguous. But this does not

logically follow. The fact that the Legislature sometimes modifies the term
o'governmental
body" to include only local governmental bodies fiust as it sometimes

modif,res o'governmental body'' to include only state governmental bodies) only proves

that the generic, broader term "governmental body" includes both local and state

governmental bodies.

B The Doctrines of Ejusdem Generís and tr/¿scítur a Socíís Do Not

Require a Narrower Construction.

In an effort to avoid the plain meaning of the term "governmental body," the

Attorney General argues that the "local only'' limitation should be infened from the

remainder of Section 2303.5055(a), which refers to "a municipality, county, or political

subdivision." See id. But such an interpretation ignores the actual language of the

statute, which states: "...a govemmental body, íncludíng a municipality, county, or

political subdivision...." TBx. Gov't CooB $ 2303.5055. The Texas Legislature has

23
instructed courts on how to interpret such language, directing that the terms "'includes'

and 'including' are terms of enlargement and not of limitation or exclusive enumeration,

and use of the terms does not create a presumption that components not expressed are

excluded." TEX. Gov't ConB $ 311.005(13). The Attorney General's interpretation

would violate this mandate, as the three enumerated examples would exhaust the universe

of "governmental bodies," and the term "including" would be transformed frorn one of

enlargement to one of limitation.

Moreover, any reliance on doctrines of statutory construction like ejusdem generis

and noscítur a sociis would also be inappropriate. These doctrines are often used to

narrow a general term based on other terms that appear in the same statutory provision.

The doctrines have no application here, however, because they are "reseryed for language

that is ambiguous or obscure." Doyle v. Støte,148 S.W.3d 611, 614 (Tex. App.-Austin,

2004, pet. denied). For example, in Doyle, the Austin Court of Appeals rejected the use

of ejusdem generís and noscitur a sociis to limit a term, "tamper," which the court found

to be unambiguous. Id. at 614-15. The court held that the better interpretive approach

was to "look to the coÍìmon meaning" of the term, noting that the term was used broadly

throughout Texas statutes. Id. at 615; see In re Estate of Nash,220 S.W.3 d 914, 917

(Tex. 2007) ("If a statute is clear and unambiguous, we apply its words according to their

common meaning without resort to rules of construction or extrinsic aids."); see also

Thomas v. Støte,91 S.W.2d 716,723 (Tex. Crim. App. 1935) (recognizing that ejusdem

generís must yield to "the stronger and better rule" that laws "be construed according to

the plain import of the language in which it is written") Similarly, "governmental body"

24
is unambiguous and, as discussed above, used broadly in Texas statutes. Accordingly,

there is no basis for applying ejusdem generis or noscitur a socíís to infer a narrower

mearung.

Furthermore, the Attorney General's proposed application of ejusdem generis

violates a fundamental limitation on the doctrine by having one of the enumerated

examples - "political subdivision" - wholly supplant the general term "governmental

body," rendering the legislature's chosen term, o'governmental body," superfluous. See,

e.g., Smith v. Wortltam, 157 S.W. 740,742 (Tex. 1913) (doctrine "has no application

where the specific words exhaust the class of objects referred to"); see (lníted States v.

Mescall,2l5 U.S. 26,31-32 (1909) ("Whilst [the doctrine of ejusdem generisl is aimed to

preserve a meaning for the particular words, it is not intended to render meaningless the

general words."). Even if specific examples suggest some limit to the scope of a general

term, the general term must still be given a meaning that is broader than the enumerated

examples. Any construction that would make the general term co-extensive with the

specific examples would improperly read the general term out of the statute. Smith,

157 S.V/. at742.

But that is exactly what the Attorney General suggests, as its interpretation would

leave no room for any o'governmental bodies" that are not one of the enumerated
examples, including "political subdivisions." In Texas, the universe of governmental

entities can be divided into either "the state" or "political subdivisions of the state." See,

e.g., TEx. Gov'r Cotp ç 2252.091; id. 5 2254.021(6). Thus, according to the Attorney

General's construction, there are no "governmental bodies" that are not also "political

25
subdivisions" of the State. The Attorney General's and Opposing Intervenors' briefs

underscore this point, as they note that "political subdivision" includes bodies such as

school districts, utility districts, and transit authorities. See AG Br. at}l; Opp. Int. Br. at

29. Such a construction would erroneously supplant the general term o'governmental

body'' with one of the specific examples - "political subdivision" - that was only used by
the legislature to illustrate the general term.

C. The Legislative History Supports Broad Interpretation of

ttGovernmental Body.t, ^
Because "governmental body" is unambiguous, the Court need not consider
legislative history to interpret it. Nevertheless, the Attorney General's argument relies

heavily on legislative history. But the Attorney General's account is a selective one, and

a more exhaustive review of the legislative history relating to Section 2303.5055 of the

Texas Government Code provides no basis for departing from the plain meaning of

"governmental body." For example, in 1997, the Senate attempted to amend Section
2303.5055 by limiting the "eligible taxes" that could be recovered under the statute. In

place of the current language, which refers generally to "mixed beverage taxes," the

Senate amendment would have further limited the term to "mixed beverage taxes payable

to a count)¡ or municipality under Section 183.051." C.S.H.B. 200l,75thLeg., Reg.

Sess., $ 7 (available at www.legis.state.tx.us/tlodocs/75R/bi1ltexlhtmVHB0200lS.htm)

(underlined phrase proposed as an amendment). If the statute were already limited to

o'local" govemmental
bodies, there would have been no need for the Senate to propose

this amendment. Moreover, the statute was successfully amended in 2009. The author of

26
that legislation, Senator Chris Harris, has explained that he intended the amendment to

allow municipalities like Irving to recover the State's portion of mixed beverage taxes

See PX22. A narrow interpretation of "governmental body'' is inconsistent with Senator

Harris' s explanation and amendment.

D The Overall Structure of Chapter 2303 Does lrlot Support Limiting

ttGovernmental Body" to Local Governments Only.

Similarly, the Attorney General's attempt to rely on the purported "structure" of

Chapter 2303 also fails to justify a departure from the plain meaning of the term
"governmental body." Indeed, a comparison of Section 2303.5055 with the other

provisions within Chapter 2303 demonstrates that Section 2303.5055 should not be

limited to "local" govemmental bodies. Chapter 2303 as a whole deals with "Enterprise

Zones." The Legislature has made clear that the provisions of Chapter 2303 are intended

to provide both state and local incentives to encourage investment in such areas. TBx.

Gov't Conp $ 2303.002 (chapter "provides incentives by state and local government to

induce private investment in those areas by removing unnecessary governmental

regulatory barriers to economic growth and to provide tax incentives and economic

development program benef,rts"). Accordingly, it should be presumed that the provisions

within Chapter 2303 encompass both state and local incentives, unless expressly limited.

ln fact, the sections of the existing statute that immediately precede Section

2303.5055 show that the Legislature knew how to limit the scope of a provision to either

o'state"
or "local" govemmental bodies if that was its intent. Sections 2303.502 and

2303.503, for example, are expressly timited to "state agencies." Section 2303.504 is

27
expressly limited to "state tax refunds and credits." In turn, Section 2303.505 is
expressly limited to "local sales and use tax refunds." Yet, Section 2303.5055 contains

no express limitation to either local or state bodies. The absence of any express

limitation is difficult to explain if the Legislature had intended to limit the provision to

local governments only.

The contrast between Section 2303.5055 and Section 2303.505 goes fuither. Both

sections are structured similarly, allowing appropriate governmental bodies to enter into

agreements to refund taxes in order to encourage development. Yet, when it comes to

identifying the appropriate governmental bodies, Section 2303.5055 and Section

2303.505 are markedly different. Instead of using the generic term "governmental body,"

Section 2303.505 repeatedly uses the specific term "goveming body of a municipality or

county." Similarly, instead of generically referring to "taxes," Section 2303.505

repeatedly specifies that it applies to "local sales and use taxes." If the Legislature had

intended Section 2303.5055 to be similarly limited, it could have easily said so through

clear language like the language that Section 2303.505 employs. Yet, the Legislature

chose different, broader language, and its choice should be viewed as intentional.

III. TrrN ATTORNEY GnNBnar, Has WnrvED ANY Crr,Ir,r,nNGE To THE PRoPoSEI)
BoNns.

Ultimately, the Court need not consider the merits of the Attorney General's

arguments. By failing to raise the biennial appropriation and "governmental body"

objections in its ansrwer and expressly taking a "neutral position" during trial, the

Attorney General has waived those issues on appeal. As discussed above, the Attorney

28
General's Answer stated that it would have "no objection" to the Proposed Bonds if the

trial court found that the allegations in the Petition had been properly proven. 3CR.487.

During trial, it reiterated its "fundamentally neutral" position. 1RR.8. Even when it

belatedly brought these two issues to the trial court's attention, the Attorney General

stated that it "t[ook] no position" on them. 3CR.662. It was not until the eve of final

judgment that the Attorney General first opposed the Bonds. By not timely asserting

these issues at the trial court, the Attorney General has waived the right to contest them

on appeal. See, e.g., TEx. R. App. P. 33.1 (requiring parties to raise timely their

complaints to the trial court); In the Interest of J.P.,296 S.W.3d 830, 837 (Tex. App.-
Fort Worth 2009, no pet. h) ("because the [Attorney General] did not plead mistake as an

affirmative defense, and because the issue was not tried by consent, the [Attorney

General] has waived its mistake defense on appeal"); Texas DOT v. Pate, 170 S.W.3d

840, 850 (Tex. App-Texarkana 2005,pet. denied).

IV. Tnn OpposING INTERVENoRS' Appn¡,1 Is InnpnopnR AND Wrrnour MnRrr.

The Opposing Intervenors' attempt to continue to participate in this proceeding is

clearly improper, and the Court should dismiss their appeal. Since the Court first

affirmed the trial court's dismissal of them for failing to post the required bond, the

Opposing Intervenors have attempted to delay that appeal as long as possible, on the

dubious theory that their delay in that appeal somehow entitles them to participate in this

one. They are wrong, and their attempt to flout the Expedited Declaratory Judgment

Act's bond requirement should be rejected.

Even if the Court allows them to participate in this appeal, their arguments should

29
not change the outcome. The Opposing Intervenors raise only three issues. One of those

issues-whether the City is entitled to the State's portion of the mixed beverage tax-has

already been raised by the Attomey General and is addressed above. And the remaining

two issues raised by the Opposing Intervenors in this appeal have already been rejected

by this Court. In the Putnam appeal, the Court held that the Entertainment and Hotel

Project r's a "hotel project" within the meaning of Section 351.102(b). The Court also

held that, even if the City Council violated the City Charter by levying the Admission and

Parking Taxes at a "special" meeting as opposed to a "regular" meeting, such a violation

can be easily cured by simply re-levying the taxes at a future o'regular" meeting. This is

exactly what the City plans to do.

A. The Court Should Dismiss the Opposing Intervenors' Appeat and Not
Consider Their Appeltate fssues.

The Opposing Intervenors' appeal should be dismissed and their arguments

disregarded because they do not have standing to contest the trial court's Final

Judgment.r3 The Opposing Intervenors were dismissed from the trial-court proceedings

prior to the entry of Final Judgment for failing to post the bond ordered by the trial court

pursuant to Section 1205.104 of the Texas Government Code. This Court has affrrmed

the trial court's bond order and the trial court's dismissal of the Opposing Intervenors.

See Dec. 13, 2010 Opinion in No. 05-10-01269-CV. The Court has also denied the

Opposing Intervenors' motion for rehearing and en banc reconsideration. See lan. 27,

t3
The City moved to dismiss the Opposing Intervenors' appeal. The City incorporates herein its motion
and reply in support of themotion. The Court denied that motion on February 10, 2011.

30
2011 Order in No. 05-10-01269-CV. Rather than expeditiously seek review by the Texas

Supreme Court, the Opposing Intervenors have yet to f,rle any Petition for Review.

Indeed, they recently obtained an extension of their deadline for doing so. This delay is a

transparent attempt to make an end-run around the bond requirement of the Expedited

Declaratory Judgment Act by continuing to participate in the case without posting the

required bond. As a result, the Court should disregard the Opposing Intervenors'

arguments in this appeal.

Chapter 1205's bond requirements are structured to assure that intervenors post

the required bond before they can further delay the case through an appeal of the final

judgment. For example, section 1205.101(a) requires the City to request a bond "fb]efore

the entry of final judgment." Sections 1205.101 and 1205.103 explain that the purpose of

the bond is to protect the City from the damages or costs that may occur "because of the

delay caused by the continued participation of the opposing party or intervenor. . . ." And
Section 1205.068 provides that only parties to the action can appeal the trial court's f,rnal

judgment. If the Opposing Intervenors are allowed to participate in the appeal of the final

judgment without posting the required bond, the entire structure of Chapter 1205's bond

requirement would be meaningless. Moreover, this Court's decision in Putnarn would

also be meaningless. In affirming the trial court's dismissal order, the Court in Putnam

expressly rejected the Opposing Intervenors' argument that they should be allowed to

remain in the case to contest the City's proposed Final Judgment. See Putnam,20ll WL

259478 at *8. ("The Taxpayers also argue that the trial court could have waited until

31
after the final judgment to dismiss their intervention. The statute . . . does not support the

Taxpayers' argument.").

B. The Court Has Already Rejected the Opposing Intervenors' Argument

that the Entertainment and Hotel Project Is Not a Qualifying 66Hotel
Project" Under Chapter 351 of the Texas Tax Code, and There Is l{o
Reason to Reverse that Holding.

The Opposing Intervenors' primary argument in this appeal is the same argument

they lost in the Putnam appeal. There, they argued that the Entertainment and Hotel

Project was not a "hotel project" under Section 351.102(b) of the Texas Tax Code. The

gist of their argument was that the boutique hotel was not the "flagship venture" of the

Entertainment and Hotel Project and, as a result, the Project was not a hotel project

within the "ordinary meaning" of the term. ,See Appellants' Brief in No. 05-10-01269-

CV at p. 16. They argued that Section 351.102(b) of the Texas Tax Code requires a

"hotel projecf' to be "a project in which a hotel is the deJíning component, that is the

flagship." Appellants' Reply Brief in No. 05- rc-01269-CV at 10 (emphasis in original).

The Court rejected this argument in Putnam. It agreed with the City that the
boutique hotel was clearly a "hotel," as that term is defined in the Tax Code. Putnam,

2011 WL 259478 at*4. Moreover, it noted that Section 351.102(b) listed examples of
the types of other facilities that could be included within the "hotel project": "'convention

center entertainment-related facilities, restaurants, shops, and parking facilities within

1,000 feet of the hotel or convention center facility. "' Id. at *5 (quoting Tnx. Tex ConB
$ 351 .102(b)). As the Court pointed out, these were precisely the types of facilities that

are to be included in the Entertainment and Hotel Project. Id. at *6. And with regard to

32
the relationship between the EC Hotel and the other facilities in the Entertainment and

Hotel Project, the Court rejected the Opposing Intervenors' attempts to engraft onto the

statute a requirement that the hotel be the "defining" feature of the "hotel project." Id. at

{<6. The Court then held, based on the de novo review required for legal issues, that the

Entertainment and Hotel Project is a "hotel project" under Section 351.102(b). Id.

The Opposing Intervenors suggest that the Court's previous holding is not binding

because it was made under a temporary injunction standard . See Opp. Int. Br. at 9. The

cases they cite for this proposition, however, do not support their attempt to ignore the

Court's prior holding. Unlike an actual temporary injunction, the trial court's bond order

was not based on a preliminary determination of the merits. Rather, the bond was

ordered after a fuIl trial on the merits. Since the Putnam appeal, no additional evidence

was presented to the trial court. There is no basis, therefore, for the Opposing Intervenors

to suggest that the Court's original holding on this legal issue should be reconsidered.

Indeed, any reconsideration of the issue would only confirm that this Court
decided it correctly the first time. The entire thrust of the Opposing Interyenors'
argument on both appeals has been that the boutique hotel is not the central focus of the

Project. They contend that the ordinary meaning of the statutory language requires that

the hotel be the *dejÍníng or índispensøble" component of the project. See Opp.Int. Br.

at 12 (emphasis in original). This proposed standard flies in the face of the actual

statutory language, which (1) was specifically amended in 2009 in contemplation of the

City's Project and (2) clearly contemplates that the "hotel project" can include facilities,

such as an entertainment center, which will support an adjacent convention center.

aa
JJ
 In2009, Section 351.102(b) was amended by Senate Bill1247. The Bill's author,

Senator Chris Harris, has explained that these amendments were specifically intended to

benef,rt the City by ensuring that its Entertainment and Hotel Project fell within the

purview of the statute. As Senator Harris recently stated:

The Cíty of Irvìng ønd theír entertuínment and hotel venue

project were specífically íntended to be covered by the støtutory
chønges we made to Chøpter 351.

PX22 (emphasis added). Specifically, "S.8. 1247 Il added language referencing

"conventíon center entertqínment-reløted facilítíes, restøurants . . . to further ensure

that the City of Irving's entertainment and hotel venue project and related facilities within

the convention center expansion would be covered by Chapter 351." 1d. (emphasis

added); see also 3RR.65-67. According to Senator Harris, the intent of these

amendments was "to account for the uniqueness of the Irving project by ensuring that all

facilities, such as restaurants, concessions, parking services, etc. would be included

within the applicable state tax refunds." Id. In fact, these amendments were the result of

a successful lobbying effort by the City. 1RR.146. In light of Senator Harris's

statements regarding the purpose of his own bill, the Opposing Intervenors' argument

that the City's Entertainment and Hotel Project is not covered by the recently amended

Chapter 351 puts them at odds with the bill's own author.

In addition, the Opposing Intervenors' argument puts them at odds with the

statutory language of Section 351.102(b), which expressly states that a "hotel project"

includes, in addition to the hotel, "any facilities ancillary to the hotel, including
convention center entertainment-related facilities, restaurants, shops, and parking

34
facilities within 1,000 feet of the hotel or convention center facility." Of course,

convention centers can accommodate thousands of people for a single conference or

event. Almost by definition, therefore, any "convention center entertainment-related

facility'' would not derive a majority of its revenue from the guests of a single hotel. It is

also difficult to imagine that there would be many retail "shops" outside (but within

1,000 feet) of the hotel building that would derive a majority of their revenues from hotel

guests. And even for "restaurants" within the hotel, it is entirely conceivable that they

might derive a majority of their revenues from diners who were not also hotel guests.

Under the Opposing Intervenors' argument, however, none of these facilities would be

could be part of a "hotel project," even though Section 351.102(b) specifically lists them

as examples of "facilities ancillary to the hotel."

Finally, there is also no basis for the Opposing Intervenors to argue that this

Court's decision in Ohnesorge v. Winfree Academy Charter School, 328 S.W.3 d 654

(Tex. App.-Dallas 2010, no pet. h.), changes this analysis or requires the Court to

reverse its prior holding that the Entertainment and Hotel Project is a "hotel project"

under Section 351.102(b) of the Texas Tax Code. If the Opposing Intervenors thought
that Ohnesgorge required reconsideration of the Court's prior holding on this issue, they

could have said so in their motion for rehearing and en banc reconsideration, which was

f,rled more than a month after Ohnesorge was decided. But they did not, and for good

reason. Ohnesorge did not involve the interpretation of the term "hotel project" or any

provision of the Texas Tax Code. Rather, the case involved the question of whether a

single charter school constituted a "school district" under the Texas Whistleblower Act.

35
Id. at 657. Moreover, the logic of Ohnesorge also fails to support the Opposing

Intervenors' argument here. In essence, Oltnesorge held that a single, stand-alone school,

without more, is not a "school dístrict." The Opposing Intervenors do not (and cannot)

contend that the City is building a single, stand-alone hotel, without more. Rather, they

contend just the opposite-that the City is building too much "project" and not enough

"hotel." In other words, whereas Ohnesorge involved a school, but not a district, here it

is undisputed that the City is building both a hotel and a project. The Opposing
Intervenors' only real contention is that it is too much "project" and not enough "hotel."

But the Opposing Intervenors have already lost that argument, and nothing in Ohnesorge

should change the Court's analysis.

C. The Ordinances Imposing the Ticket and Parking Taxes Were

Properly Passed at a Special Meeting.

As they did in the Putnam appeal, the Opposing Intervenors also argue that the

ticket and parking taxes are void because they were not adopted at a "regular" meeting.

They are wrong on this point. But even if they are right, it cannot be grounds for

invalidating the Proposed Bonds in their entirety. Rather, as this Court noted in Putnam,

the City can resolve any procedural issue by simply re-voting to levy the taxes (which

have already been approved by City voters) at the appropriate type of meeting. Out of an

abundance of caution, the City currently plans to do just that at a future City Council

meeting.

1. The Pørkíng ønd Tícket Tøxes were vulídly pøssed øt ø "specíø|"

meeting.

Contrary to the Opposing Intervenors' argument, the $3 parking tax and l0o/o

36
ticket tax-approved by the City Council at a special meeting on August 25,2010-,were

properly levied in compliance with the City's charter.la With regard to the passage of

ordinances at City Council meetings, the City's charter specifically provides:

No ordinance, unless it be declared an emergency measure,

shall ever be passed at a cølled meeting, but may be passed at
any regular meeting of the council unless otherwise provided.
All resolutions or orders may be passed at any regular
meeting or may be passed ut øny specíøl or called meeting
called for that purpose.

IRvrNG, Tgx. CUARTER, art. IV, $ 17 (emphasis added). These two sentences, read

together, mean that (1) all ordinances, resolutions and orders may be passed at any

regular meeting; (2) all ordinances, resolutions and orders may be passed at any special

meeting; and (3) only emergency ordinances may be passed at called meetings, which

must be called specifically for the purpose of such emergency action. The second

sentence is not superfluous, but simply modifies and expands upon the first, making clear

that ordinances, resolutions, and orders may be passed at special meetings or called

meetings, if called for the purpose of such action.

The Opposing Intervenors assert that an "ordinance" is different from an "order"

and argue, therefore, that no ordinances may be passed at special meetings. This

argument, however, is contradicted by the plain meaning of the word "ordinance" as well

as by the City's long-standing interpretation of this provision.

First, as the Opposing Intervenors argue, the Court should look "first and foremost

'o Both of these taxes were approved by City voters inthe 2007 Election. pX9

37
to the plain meaning of the words used." Opp. Int. Br. at 36 (quoting First Am. Title Ins.

Co. v. Combs,258 S.W.3d627,631 (Tex. 2008)). Using this approach, it is clear that
"order" is simply another word for "ordinance." ,See MERRIAM-WEBSTER'S CoLtEcIetB
DIcrloNaRY 816 (10th ed. 2000) (defining o'ordinance" as, among other things, an

"order"); WsssrBR's THnn NEw INTBRNauoNAL DrcuoNeRy 1588 (1986) (same).

And the charter makes sense only if "order" and "ordinance" are considered to be

slmon)¿mous, as the City Council does not pass 'oorders" at all.ls See 1RR.233.
Therefore, the plain meaning of the words "order" and "ordinance" makes clear that

ordinances may be passed at regular, called, ønd speciar meetings.

Second, the City's reading of the charter is supported by the City Council's long-

standing interpretation of Article IV, SectionlT. See Humbte Oit & Ref. Co. v. City of
Georgetown,42S S.W.2d 405,409 (Tex. Civ. App.-Austin 1968, no writ) (in construing

an ordinance, the court relied, in part, on the way the city had interpreted and applied that

ordinance in practice). As City Attorney Charles Anderson testified at the trial, the City's

charter identifies three types of meetings: (1) regular meetings, which are placed on the

City's calendar; (2) called meetings, for which notice is posted two hours in advance; and

(3) special meetings, for which notice is posted 72 hours in advance but which do not

appear on the City's calendar. 1RR.229. Anderson made clear that the City's charter

tt City Attorney Charles Anderson testified that'l think order is a term which, in light of municipal
regulation, would also mean ordinance. So I would say it is an order. The City Counõil basically acts
through a resolution or ordinance. An order, I think, would be somewhat of a shorthand form of an
ordinance." Id.

38
specifically authorizes the City Council to adopt ordinances in both regular and special

meetings. lRR.229-30. And the meeting at issue here was a special meeting: notice was

posted more than 72 hours in advance of the meeting. 1RR.230-31. As Anderson

testified, the passage of these two ordinances at this special meeting was proper under the

City's charter. 1RR.230-31. Notably, this is not a new interpretation. As Anderson

testified, during Putnam's tenure as Mayor of the City of lrving, the City Council

regularly passed ordinances at special meetings. lRR.23l.

In short, because the City Charter clearly contemplates and authorizes the passage

of ordinances at special meetings, the Opposing Interyenors' argument that the

imposition of the ticket and parking taxes is void is without merit.

2- Any víolutíon of the Cíty Chørter could eøsíly be remedied by re-

øuthorizíng the tøxes at a regulør meetíng.

Even assuming, for the sake of argument, that the Opposing Intervenors are

correct, however, it is of no consequence. As the Court held in Putnam, the Opposing

Intervenors "have not presented any reason why the City cannot pass new ordinances at

the next regular meeting to eliminate any concern that the taxes were not properly

imposed." Putnam,2011 WL 259478 at *7. In fact, these taxes would not be collected

until the Project is built and operating, so there is ample time for the City Council to re-

authorize the Admission and Parking Taxes at a regular meeting. In a similar context,

Texas courts have long recognized that Open Meetings Act violations can be cured. See

Smith Cnty. v. Thtornton, 726 S.W.2d 2, 3 (Tex. 1986); Lower Colorado River Auth. v.

City of San Marcos,523 S.W.2d 641,646 (Tex. 1975); Burks v. Yarbrough,I5T S.W.3d

39
876, 883 (Tex. App.-Houston [4th Dist.] 2005, no pet.); Cíty of Bells v. Greater
Texoma UtíL. Auth.,790 S.W.2d 6, 11 (Tex. App.-Dallas 1990, writ denied). See also

OFTIcB oF THE Tpxas ArroRNBy GENERAL, OPEN MEsrrNcs HANDBOOK, at 65 (2008).

Here, the City's ability to address these issues at a subsequent meeting is underscored by

the plain text of the Act, which allows cities to obtain judicial validation of proposed

public security authorizations such as the levying of taxes to be used as security for

bonds. TBx. Gov'r Coop $ 1205.021(2).

Here, if the Court concludes that the taxes must be levied at a regular meeting,

then it should simply modify the Final Judgment to provide that the ParHng Tax and

Admission Tax will be duly and validly enacted by the City Counsel upon the passing of

a City Ordinance levying those taxes at a regular meeting. See Tnx. R. App. P. 43.2(b)

(providing that the court of appeal may "modify the trial court's judgment and affirm it as

modified'). Indeed, while the City believes that its tax ordinances were properly adopted,

it can and will place the ordinances on a future agenda and re-adopt them in order to

remove any suggestion that the original levying of these voter-approved taxes was

improper.

CONCLUSION AND PRAYER

For the foregoing reasons, the City of Irving prays that this Court affirm the trial

court's Final Judgment in its entirety. The City further prays that the Court grant such

other and further relief to which it may be justly entitled.

40
 Respectfully submitted,

(
L
Charles R. Anderson Michael L. Raiff
State Bar No. 01170500 State Bar No. 00784803
Office of the City Attorney Gibson, Dunn & Crutcher LLP
825 West Irving Boulevard 2100 McKinney Avenue
Irving, Texas 75060 Dallas, TX7520l-6912
972.721.2541 2t4.698.33s0
97 2.7 2 I .27 50 (facsimile) 21 4. 57 I .2927 (facsimile)
c anders on @city ofrwin g. org MRaiff@gibsondunn.com

Ray Hutchison
State Bar No. 10352000
Thomas S. Leatherbury
State Bar No. 12095275
Robert R. Collins, III
State Bar No. 00792420
Julie M. Partain
State Bar No.24032734
Marc A. Fuller
State Bar No.24032210
VTNSoN & ErrrNs LLP
2001 Ross Ave., Suite 3700
Dallas, Texas 7 5201-297 5
214.220.7700
21 4.999 .7 7 92 (facsimile)
rhutchison@velaw.com
tleatherbury@velaw. com
mfuller@velaw.com

Attorneys for Cíty of lrvíng

4t
 CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of Brief of Appellee City of Irving has

been served on the following on this 21't day of March, 20lI:

James B. Harris Frank L. Branson
Richard B. Phillips, Jr. Eric T. Stahl
Tnol¿psoN & KNrcur LLp LAw OpT.ICES oF FRANK L. BneNsoN, P.C
One Arts Plaza 4514 Cole Avenue, Suite 1800
l722Routh Street, Suite 1500 Dallas, TX75205
Dallas, Texas 7 5201-2533 Tel (214) 522-0200
TeI 214-969-1700 Fax: (214) 521-5485
Fax: 214-969-1751
Attorneys for Las Colinas Group, LP
Attorneys for Joe Putnam and Irving
Taxpayers Opposed to Illegal and
Wasteful Use of Tax Money

David J. Schenck Robert D.Mafünez

P.O. Box 12548 CorroN ScHunr & Aeeorr, LLp
Austin, TX787ll 550 Bailey Avenue, Suite 600
Tel: (512) 936-1342 Fort V/orth,TX76l07
Fax: (512) 936-0545 Tel: (817) 338-4500
Fax: (817) 338-4599
Attorneys for the Attorney General
Attorneys for Greater lrving-Las
Colinas Chamber of Commerce
Mikel J. Bowers John F. Boyle, Jr.
BNII NtrxrNeI-rY & MARTTN LLP Boyls & Lowny, L.L.P.
3232 McKinney Avenue, Suite 1400 4201Winsren, Suite 108
Dallas, TX75204 Irving, TX75062
TeI: (214) 740-1400 Tel (972) 650-1701
Fax: (214) 740-1499 Fax: (972) 650-7105

Attorneys for B Concessionaire- Attorneys for Dallas County Utitity and

Las Colinas, LLC Reclamation District

42
 SAMPLE DOCUMENT
AGREEMENT FOR DISCLOSURE OF CONFIDENTIAL
tAX INFORMATION

This agreement is entered into between the City of , Texas (hereinafter the
"City") and (hereinafter the "taxpayer") for the purposes indicated
herein.

I, (title), the duly authorized agent of

a vendor doing business at the premises of the convention
center hotel (the "Hotel"), Known generally as the " Hotel", located adj acent
to the Convention Center in City, County, Texas, do hereby
stipulate and agree as follows

-
I hereby authorize the Texas Comptroller's Office to release and disclose any and
all Sales and Use tax information and/or Hotel Occupancy tax information relating to the
operation of the above referenced taxpayer's business at this location to the City of
Texas. I understand and agree that this release will be made by the
Comptroller's Office to the City on an ongoing basis beginning on the commencement
date of the Hotel's initial occupancy. This agreement waives any and all rights with
respect to the parties regarding the confidentiality of tax information under Sections
1 1 1.006, I5I.027 , Tax Code, or other state law.

The City agrees that it will use the tax information disclosed by the Comptroller pursuant
to this Agreement solely and exclusively for the purposes of monitoring the receipt of
certain Sales and Use taxes and Hotel Occupancy taxes to which the City is entitled to
receive in accordance with the provisions of Sections 3 5 1 . 1 02(c) and l5I .429(h) of the
Texas Tax Code.

This Agreement is entered into in- City, County, Texas and Texas Law
will apply to its interpretation and enforcement.
-
SIGNED AND AGREED TO on this day the day of 2008.

Name, Director of Finance On behalf of the "Taxpayet"

On behalf of the City, Texas
(the "City'')
3121l20tL https ://ou rcpa.cpa.state,ü. us/a locatio.
I

ffi Wi r:,eå*w #{z%tet* ffi*ut *r nrffi ffi r* { Saaset? fl#t?åhs Twxe füirnpts*ll¿:r *.fl {}rrfuìåc *,**r*acs{s

Texas Taxes

Mixed Beverage Allocation Historical

Summary
By law, all mixed beverage and private chrb permit holders remit to the Søte Conpfoller a I4o/o
gross receþts tax on their mixed beverage sales each month" Following the end of each calendar
quarter, 10.7143% ofthe tax paid is allocated to the county where each business is located. For
any brsiness located within an incorporated city, another 10.7143% ofthe tax paid is allocated to
the city where it is located. The remaining tax is disürbuted to the State's General Revenue Fund.
Those quarterþ allocation payments to the cities and counties are summarized in the Mixed
Beverage Tax Allocation Histories. The payments are listed according to the month in which they
were distrbuted and totaled for each calendar year. Mixed Beverage Tax allocation amounts are
dependent upon the timing and accuracy oftaxpayers' returns and payments, but generaþ
represent taxes remitted to the Corrpfollefs office dwing the calendar quarter innnediateþ
preceding the month the allocation is disürbuted.

City or County Summaries

# CtV # County

Cityor CountyName

See also, the allocation historical surunaries for local sales tax.

Statewide Summaries

All Counties
State Relenue

Get Statewide Summary

Ifyou have questions about the Mixed Beverage Allocation Historical Sunrnary inforrnatior¡ please
contact us by email at tax. allo cationl¿D cn a. state. tx.us.

texas.gov $ Statewide Search from the Texas State Library | State Link Policy I Texas Honreland
Sec urity
ou rcpa. cpa. state.tx. us/.../M ixBev.jsp u2
312U201L https://ourcpa.cpa.state.h,us/allocatio...
Susan Combs, Texas Comptroller r Window on State Governrnent ¡ Contact Us
Privacy and Security Policy I Accessibility Policy I t-int< Policy I euntic Infornration Act { Compact
with Texans

ourcpa, cpa,state,tx. us/..,/M ixBev.jsp 212

 SICOND
NEW ¡SSUES
- BOOX ENTRY ONLY RATTNCS
- See "RATINGS" hemln
slol.tn.ilt wlh ÌetFct to ahe Senß 2U)l Botdt wh¡ect to thz Sccond Offen Prlcltg Ccrttfcatc anl tltc Thml OSats PncùE Cerí,f.øt¿

heretn lor a dtscwstou of Co.Eoud Coutuel i opunon uduùng a dcscnpttû of c¿ñaû olt¿ntat¡te nuil¡ttun ta\ p,ß.qn.rc¿Ì to <otryranoilt

$626,539,593.75
CITY OF'HOUSTON, TEXAS
Convention & Entertainment Facilities Department

st$,335.000 $t2620¿,5e3,7t ¡lf{l,o{D,(x)ft

llotel Occupancl Trx ¡nd Hotel Occuponcy 1¡r ¡nd Hotcl Occuprncy T¡x and
Spec¡¡l Rcv€nüe Rclundrng Bonrls Spcchl Rercnuo Bonds, Spechl Revenue Adiust¡ble
Se¡les 200t4 (Flxed Rrte) Sedcr 200t8 (Fixed Rrte) R¡te Bondq Se¡les-2{X}lCi
Dd(Êd {pfll 1.200t lntcrsst Accru¡l Þatcs Cur¡cnt l¡tc¡çst Sondr
- A¡rll I 2001 Duc Srptembcr l, as shown on lnrrdc Covcr Prgcs
Ctrprtsl ÀppæclÉtlon Bond¡ of Dehvery
Adjutublc Rilc Bondt Datc - D¿re
of DcÙvcry
-
Thc Crty of, Hourton Tc¡as Convcntro¡ & Enlc¡r¡rnmcnr Frcrhucs DËÞ¡rtmcnt Hot€l Occup¡ncy T¿x snd Sprcrrl Rcvcnw Rclund¡ng Bond¡ Scnc¡ l@lA lF¡xed Råtct íthc
'S€nÈi 2mlA Bonds ), Hotêl Occoparcy Tar md Sæc¡¡l Rcvaue Bondr,'Scnc¡ 2001 B (Frxcd Ratð) (thc "Scn'cs 200t B BondC') and ilor¿l Occup,rncy Tar and Soccld Rdvalc
AdJuslabló RElc Bo¡d¡ Scncs 1001C (rhc Scnq! 200tC Bonds') orc bgn¡ urucd by rhc Crly of Houston (rbc'Clty ) fo¡ thG pùrûo¡cs dcscnbd bclÑ (cóllocnvcly. tht Scnc¡ 2001A

otdrntDcr adopted by thc Crty on March 21 2(x)1 (lhc Otdrnancc") a¡d ændt O{iæn Pncrng Ccnrfrcater ¡urhoñ¡êd by thc Ordrnancc rs dsnbcd bctow
A ponton of rhc Scnç6 200lA.Boñdr ¡n thc pnncrpâl Àmount of ¡I14,675,0q) rnd å Þotron of thc Ssnc¡ 20018 Bond¡ ln thc pnnctp¿l amount of5146 3¡4 591 75 wrll bt o¡ucd
amont of tl5 óó0,000. and thc b¿loncc oI rtÇ S_Êrc-s_2O0tB Bc-nrts. rn l!Èffi|þr¡ ¿mouna ol $l?9 690,000, ûll bç Erucd þunuont to thc OrQrnqnçc ¡nd { rÊ{ond Offceri Pncing
Cêrufcutcthatßêrpcctedlobcdetcd¿¡ofApnt19 2001 (thc'SccôndOfcinCå¡t¡Ícrtc ) ThcScnar2&lCBond¡rnthcphncrpsl åmountof3l500000(ÐwrllbcEau€dounua¡lto
lhc Ordln¡nc,c r¡d s thr¡d Oñccr¡ Pncrn¡ Ccrirñøtc thal ú cxpcclcd to bÊ (htód¡l qLU6y ? 2001 (thÊ Th¡rd Oñccn Pncni Ccnìôc¿rc') Thc Senc¡ 2001C Sondr mll oinr¡r otrwo

and rub¡ect to c€ftrtn rÊsrncttonr. to bonds tha¡ bcar rntcrcsl Él râοs olh€t tÍrn ¡n Aucuon Rote
puryosc of ahc ôîúcríÉ rncludø thÊ followrng (:) rcfundrn¡ rll oubr¡dm¡ bond< (rhc 'Rcfundcd Bonds") pævro¡¡Þ ¡¡süÊd by thc Crry to ñnucc thc Gc¡¡rc
- Tho R Brown

Houllon SÏtrrls Authonty to rcnc es-an aæna for profccsronel bukstbsll rnd hdtoy (thd "ercnu ) ûnd to bG lo€atèd ûdrffint ta lhc Holcl rnd (vl) clt¿bhshut icqurrcd r*na and
Pry¡n8 ths st¡ of such nsruæ snd rcfundrn¡
Thc Eonds ræ rpccrrl hmrtod obhgatrons of tha crty thlt to8Ethcr rlah Add¡t¡on¡l ponty Eond¡ ¡f .rnd whcn rsucd ud ccrtorn oltlsr oblrrotronc dcænbcd ln thc Ordtrancc drc
p¿yablc rulcly ffpm ¡nd ¡æurcd cqu¿lly and ¡alauy by á bsn on ã pôrllon of thú rewnuè! denvcd by rhÊ Crtv fþß tÀG lol¡cctron of ¿ Horcl G¡rrp¿ncy Tar tñDolcd by thc Ctrv or
auhtantnlly all holcl ræm Èâtrlr tn thc Crty ært¡rn rvcnua dcnvcd fmm thÊ hrþng Fgcrlrtr€r d;yrnbcd hcærn, ccfun ævenuc¡ dcnvcd fmm rt¡c Þhdcpd Tix Rcb,itcs ¿æcríbed
hÈtern dÃd ccrtù¡û othcr fundt dc¡cnbcd rn thc OrónancÉ (wllcctrvcly thc "Plcd¡ad Rcrysnucr ) lHE BONDS ARE NOT A CENER,\L OBLÍGATÍÕN OF THE CITy THE
STATE OF ¡EXÁS OR AÌ.fY POLITICAL SUÐDIVISION THÉREOT AÑD THE OT¡/ÑERS OF THE BONDS SHALL NEVER HAVE THE RIGHT To DSMAND
PAYMENÍ OF ANY BOND OUl OF ANY FI'NDS RAISED OR TO ¡E RAISED BY TAXATIO\ OTHER TI{AN THÊ PLEDOED REVENUES AS 381 TO TH IÑ NTS
ORDINANCE THERE IS NO MORTOACE ON OR OTHER SPCURIÎY INTERESI IN THE CONVENT¡ON CENTER THE HOTEL ORTHE Pá.RX,iNO OARÂCE (OR
ANY REVENUES THEREOF) TO SECURË THE PAYMENT OF AND LIENON THE PLÉDCED RÊVENLES FORTHE BENÊFTT OF THE OWNERS OFÎHE SERìES
200t BoNDS

MATURITY AND Pß¡CINC SCHEDULßS

- $e lrord: Corcr Fr¡a
Thc Scn¿¡ 2@tA Bond¡ w¡lt bc ¡r¡ucd Er currcnl ntcnrt bo¡rd¡ only Thc Sorna 20018 Bondg w¡li bo ¡r¡ucd both ar cùtrcnt tntcrÈt bo¡¡dr (thc "Scflca 20olE CuÍcnt lrtcrcs(
ñrédratcifromApdl200l Ándwrllba¡rayrblcerchScptcnbe¡trndM¡rchl,commonongScptcmbErlzq)l ¡rtc$stonthcscncs200lBCqpttnl ApprcclôrtonEondsmllaccraar
ñrcd ratcr flom lñc dchv€ry d¡tc snd qr¡l li cornpouadci c¡ch ScptÇmb€r ¡ dd MEEh l, õornmcncrng Sqptcmbor t z(Pl 6nd wrll bc p.ryablj onlv ar'marunty
. lntcn$ or lhc Scna 2001C-l B¡nós snrl Scmr 200fC 2 Bondr, whrlo ortrtonùg or ÀRCs wrtl bc plynbtc thc dny rllcr øch lntercst Pcnod. m ¡f such day r not a Busrm Day,
(tl) Junc 20,2001. wtth actpecl io thc Scnx 2001C.2 Bondr. ând thÉ Bpüctwc lÍtôËit Pcflods theÉafter v¡ll bc 35 iucoc¡¡rcc days commencirg on a Thursday and cndrng on (and
ond Aucrron Pcnod¡ *rth ¡u¡poct to thc Scncs 2001c I and C-2 ARCg ¡h¿ll bc qi¡bluhÊd frcm-trrc to rrmc púsuanr ro thi Auirron
f:*:illl,".X:ÍffrtåTJlt îtJlltiïtfrBlRårc
Thc Bond¡ lv.ll bc ræucd ¡n dcnomrnûtronr of Si 000 mricrgsl amrunt for tho SËncs 200f4 Eonds and thc Scnes 2fi)lB Curnnt lûtÊrÉ3t Bonds (oÌ ¡n¿tunty r¡nount for rhc
r€8rslcËtltn,lh.namcofçrdc&Co,13rcgstcrldomcrand¡omrncoforThcD!ÍûtltôrtTru¡tCÕmoôny NcwYork NcwYork('DTC"),whrchçrll¡cI¿sJæuntrcsdcDosroryfo¡thc
A;longuCcdr_itCo rthccxclurvcrcgrsteridosncrofrhiBond¡ p¡ynicnuof Þrmdbôlof å¡tdrniÈrertonrhcBond¡ç¡llbcpåtdtoDTCbyTheCháecMmhsttònB¡nk NewyorK
lreltln
Cc¡trlß of ahË Donds lrr ilblÊct (o Ëd3trlDllot pr¡or to Eat¡flty ¡s daa.Îlb.d flc¡llõ.

," bJ:};,åT3i:io,,liltilfifrlä:"H;'"i1iJ"¡:ffiilHB$"ËHå"å#å*,å;
Thc Scncs Z00l Bmd!
Ës"l'üi$Tt?ffi"Ëå'^!åTñg,jåîftiF'"v An Mc
a¡Ê oficr€d by thc UûdcintcE, whcn, t! end lf $üed by thr Crty ¿nd accrptÊd by ond dcl¡wltd t0 thÊ Undêrvntcrs Íncd b¿low, ¡ubjcct to ttl¿ sppmvrng
o¡tnnnsof lheAttôñcyGrnetaJof lhrStatoofTcxo¡ardtbooprntoúof Fulùn¡hi&J¡uórokrLLË,Vrnion&Elt¡¡¡ LLP andBun¡lL,LFtçnq¡r.rlousion Tcra¡ Cä0mð
Counrcl for tho Crty, t¡ lo thc v¡hfi¡y s¡ ¡¡. u¡uancc of thc Bonds under thc aoo¡tr$non ànd lnwÉ of thê Storc of Tira¡ Ccr(i[ lcEål ñ¡nci¡ w¡ll bc p¡¡¡d uDon for thc C¡ty by rte
lpccral DsclouæOo-Counscl, Andriwr & Kunù LI- P,rnd Wrcll¡fr& Hal! PC.Hortoq ÎÈràs Cçdato o(hcrlotal msttcnçrll Ép{ascdonlorthc'Undcuåtcrs by thcrrCouiæl
WtnslcF( Slchr€Êt & MlnÉk P C , Hourton T¿¡o¡ Sr¡ch Bon¡l¡ ¡rr G¡prctcd to bc rv¿¡l¡blc for dcftvcr¡r through tbã l¿crlrr¡c6 of DTC'o¡ or rbou¡ Msy E 2001
UBS PAINEIYEBBER
(Co-Eookrunnlag Srnlor
INC.
Mrnr¡cr)
LEHMAN BROTHERS
(Co-lookrunnrng Scalor Menrgcr)
LYNCH
MERRILL RÀMIREZ & CO. TNC.
SIEÐERT ÐNANDFORD SI{ÁNI( & CO. U.C U.S. BANCORP PIPER JAFFRAY
ÀPEX PRYOR SECURTTIES BANCONECAPITAL MARKETS BEAR, STE.ÀRNS & CO. INC,
(r drvrsrcn of Rlcr trlnlrclrl Ploducts Comprny)
DAIN NAUSCHER JPMORCAN LOOPCÁPÍTÄLMARKETS
SALOMON SMITH BARNEY SBK BROOKS.INVESTMENT CORP.
Dûtc Mârch
^30,
z00l (portron of thc Scnø 2001 Bonds authonzd by thc Fi¡rt oñccrs pncrng ccrrrñcatc)
A¡al 19 2001 (Porton of thc Scr¡c6 ?00¡ Bo¡rdr Âuthonzcd bi thÉ Sccoßd Omccrs Pr¡cfns Ceruñcátc)
MayT 20Ot (PortronofthcSencs200tBondstobcauthorírèdbythcThrrdOfficcrsPãcrngConr6cetc)

I Consrstrng of Sencs 200tC-t Bond¡ ¿nd Scnm 2001C 2 Bonds, rnrhâlly tlsuoô a! Auctton R¡rc Ccftfrcatcs
- ARCs G ARC6 ¡s a rcgrstcr€d trâdcnìtrl of UBS PuncVcbbcr Inc
 l'lr*qlon æo(

PLEDGEII REVENT,'ES

Descrlptlon of Pledged Revenues

Pledged Reveuues committed by the City to the Series 2001 Bonds (and any Additional Parity Bonds)
consist of the following: (i) a portion of the revenues derived from imposition of thc City HOT in an amount equal
lo 5.650/0 of thc room rentals collectcd by all hotels located within the City (except for the Hotel for the fust ten
y.ears of its operatíon) (such portion of lhe City HOT, as fi¡rther described in APPENDIX B, the "Pledged HOT");
(ii) revenues collected from seven existing City-oumed parking facilities (excluding the Parking Garage) described
in the ¡ection captioned "-Parking Facilitics" (such rcvenucs, as ñrrthcr dcscribcd in APPENDIX B, thc '?ledgcd
Parking Rsvenucs"); and (iii) rebates of the following taxes derived frorn the operation of thÇ Hotel aud the
Exclgsive Hotel Patking for the ltrst ten yeers of their op€ration (as further descn'bed in APPENDIX B, collectively,
the "Pledged Tax Rebates"): (A) sales and use taxes ('sales taxes') impoúcd by the State of Texas (the "Stet€"), the
City and the Mehopolitan Transit Authority of Herrís County ('METRO") at a cumulative rate of 8.25%; (B) hotel
occupancy taxes ('TIOTs") imposed by the State, Harris County, Texas (the "County') and thc City, Uui not the
$ports Authority, at a cumulative rate of l5%; and (C) mixed beverage taxes imposed by the County and thc City ar
a cumulative rate of 3%. Pledged Revenues glso include the interest and inveltmcur income derived by the City
from the invesfment of añounts credited to ccrtai¡ special ñrnds as provided in the Ordinance as well as certain
other funds available for and pledged to such purposes under the Ordinance.

The City's pledge of pledgcd parkiug revênucs is subordinate to the City's ptedge of the first $1,20O,000 of
such gross levenues, charges and tolls to the palment of its $1,000,000 annual obligation under the Music flsll
Lease, unless such obligation is paid, defeased, mÂütres o¡ ís othcrwíse restucturcl. See ,,SECURITY A]{D
SOURCE OF PAYMENT FOR THE BONDS-Plcdgcd Parking Revcnue." In addition, as notcd, Plcdged
Rcvenues do not includc (i) any revenues d¿rived from imposirionõf the Ciry HoT at a rate grearer than 5,650lo
(except at the Hotel forthe first ten years ofits operation), (ii) any operating revenues ofthe Convention Ccnter and
the Hotel, thc Parking Garage or ¿¡ny othe¡ City-owned parking facilìties and (iii) City HOT revenu€s athibutable to
any adclitronal hotel the Ciry deveiops in tbe futurc to complement the Convcntion b.nter for its first ten ycars of
opcration. Currently, lhe City HOT is imposed at a rate of 7o/o. As a result, reveuues derivcd from thé l.¡Sø
portion of the City HOT in excess of 5.ó57o do not constitute Pledged Revenues. However, for the f,ust ten years of
operation of the Hotel, all revenues deriveit Êom irnposition of the City HOT at lhe Hotel, which will be irnposed at
its full rate on room rentals at the Hotel, are includrd in the Pledged Tãx Rebetes. Afler ten yearsr revenueJderived
frorn imposition of thc Ptedgcd HOT (at a ratc of 5.65%) on roorn rentals at the Hoßl are included in Pledged HOT.
Moreover, there is no mortgage on or other security inte¡est in rhe Convention Center, the Hotel or thã parking
Garage (or any revenues thercof¡ to secure the pâyment of and lien on the Pledged Revenues fo¡ the benefit of the
bondholders rn the City's proposed financing, and all such facrlrties are €xempt from ad valorem taxatio¡r.

29
Description of the Pledged T¡¡ Rcbates

The Pledged Tax Rebates pledgcd to the Serics 2001 Bonds (and any Additional Parity Bouds) consist of
rebates of the following taxes derived ùom the opcration of the Hotel and the Parking Garage for tbe fust ten years
oftheir operation:

(t) hotel occuparcy bxes inposed by the St¡te, the County and the City þut not thc Sports Authority) at a
cumulative rate of l57o;

(ii) sales taxes inposed by the State, the City and METRO at a cunrulativc rate of E.257o;

{iii) mixed beveragc taxcs imposed by thc Stste and rebated to thc County ¡nd the City at a cumulative rate
of 3o/o.

In 1993 the Texas Lcgislatwe enacted House Bill 2282 (as amcnded in 1995 and subsequently codifred in
part in Cbapter 2303 of the Texas Govemment C;ode, "HB 2282"r, which pcrmits a taxing unit lo enter into an
agre€¡¡rent witb the owrrer of ce¡Îaìn qualified hotcl projects (as defincd in HB 2282, "Qualified Hotel Projects") to
refund rebate or pay certain taxes, íncluding the taxes described above, that arc gcnerated, paid or collected by a
Qualiñed Hotcl Project or a business ot a Qpalified llotel Projcct, to the owncr of e Qualified Hotel Ptoject. HB
2282 also provides that the orryner of a Qualificd Hoûel Project shall receive a rebate, refrrn{ or payment of all State
sales taxes paid or collected by the Qurlificd Hotel Project or businesses located ¡n the Quaüfied Hotet Project and
all State hotel occupancy taxes paid by persoru¡ for thc use or possession of or for thc right to the use or possession
9f a room ot spacc at thc Qualified Hotel Projcct during thc first l0 years after such Qual¡ficd Hotcl Project is opcn
for initial occupatrcy.

The llotel, tog€thcr with the Parking Garoge, constihrtes a Qualified ÌIotel Project under HB 2282. Tþß
Hotel Corporation has entercd into sepuate tax rcbate agreeüÉnts with thc City, the Counry and METRO tl¡at
provide for fhe rebatc of the various taxes described above, The tax rebate agr€ement with the City applies to sales
and usc, mixed beverege and hotel occupancy tâxes. The tax rebate agreenrcnt with the County applies to mixed
bevcrage and hotel occupancy laxes. The tax rËbatc sglcement with METRO applics only to sales and use taxes.
Each tax rebafe agreemcnt is in effect for a pcriod oftcn ycars, comrnencing on thc date rhe Hotel is first open for
use by the general public.

Soc, "TTfE HOTET CORPOR^A,TION-I¡tcrlocal Agreement" for a discussion of the assignment of the
Pledged Tsx Rebates to the City as security for tbc Series 2001 Bonds. For projection of Pledgod Tax Rebates
during the ten year period following ttre initial occupancy of the Hotel, see "REVENUE CONSULTANT
ANALYSIS,"

35
Pledged Tax Rebates

The Pledged Tax Rebates will be impacted by occupancy rateç and A,DRs at the Hotel. Key factors
affecting the anrcunt of rcvenues generated from the rental of hotel rooms include the hotel's bnnd ¡ame
recognitio4 market support, and resewation systcms. Occupancy and ADRs will also be affected by factors outside
the conhol ofthe City, tho Hotel Corporation and the Hotel OpÊrator, such as general levels ofconvention business,
business kavel, tourisû and seasonality. Such fluctu¡tions may adversely affect the amotmt and timing of Hotel
revcnues and, conscquently, advcrsely affectthc ¡nount ofPledged Tax Rebates available to pay debt service on tbs
Series 2001 Bonds.

Pending Leglslrtive Session

The Texas Lcgislature is now necting in its biennial regular session ending May 28, 2001. Certain
legislation, if enacted, may affect the opcrations of the City, the C&EF Dcpartmcnt and the Hotel Coryoration . tn
particular, certain lcgislatioq if eaactcd, would affcct the bidding aud procrucment process applicable to local
tovemment corporations such as the Hotel Corporation, The City çannot prealict whic\ if any, of such legislation
will be adopted or whether any such legislation will have a material adverse effest on the City, the C&EF
Department or the Hotel Corporation.

Bond Insurer

The value of ths Bonds rnay be affected by poteutial changes in the ratings of the Bond Insu¡er. In the
event of a signifìcant downgrade of thc Bond Insrrer, the Series 2001C ARCs could trede at higher yields than
anticipated, up to the Maximum ARC Rate. Si¡ce tbc Pledged Revenues provide only a ñnite source of revenue for
repayment of the Bonds, a higher rate on the Series 2001C ARCs could reduce the amor¡nt of Pledged Revenues
available for the remainder of the Bonds.

Summary

The foregoing is intended only as a sununary of cerÞin invesüncnt consi{ftÞtions attendant to an invesEnent in
the Series 2001 Bonds. In order to allow potential investors to identiff invcstnent comiderations and rnake an in-formed
investment decision, potential i¡vestors should bc thoroughly famitiar with üre entire Oflicial Statement and the
appendices hereto and should have accesscd whatcvcr additional financial and othqr information any such investor may
deemnccessary to make its dccision to invest in thc Scrics 2fi)t Bonds.

THE CITY A}TD TIIE DEPARTMENT

The City o[Houston

Houston is the fourth largest city in üe nation and the largest in Texas. In 1999, the City's population e/as
approximately 1,EE0,000 (according to the Texas State Data Cenrer), and the population of its prirnary mstropoliran
ståtisticâl ârea was approximately 3,E00,000, which is the ninth largest in thc United Süates, Located on the coastal
plain in Soutt¡cast Texas, approximately 50 miles from the Cutf of Mexico, the City is a major center for the retail,
energy, financial, rnedical, transportation and mauufacturing induskies and lies within one of the largest
mehopolitan statistical areas in the United States.

The City has a mayor-council form of goverunetrt in which the Mayor and the fourrecn-member Crty
Council serve as the legislative body. Nrne council members are elected by distict and five council members are
elected at-largc. The Mayor, all mcmbers of tlrc City Council and the Cify Contsoller a¡e elected for two-ycar terms.
The present terrn of office for all elected officials expíres in January 2002. The Charter limits the terms of office for
all elected City oflicials to th¡ee consecutive two-year terms.

4t
 THE ATToRh¡Er GsruEner Sr¡rt o¡ Trx¡s
Ofrrct o¡
Cont¡Yl'¡
JoHrv
May 7,2001

THIS lS TO CERTIFY that the City of Houston, Texas (the "lssuer"),

has submitted to me City of Houçton,-lexas. Convention & Entertainment
¡acilities Department Hotel Occupancv_lax and Special Revenue Bonds.
Series 20018 (the "Bonds") in the aggregate principal amount of
5326,204,593.75 for approval. The Bonds, issued as a Current lnterest
Bond, numbered AGB-1 in the principal amount of $206,295,000 and as a
Capital Appreciation Bond numbered AGBC-1 in the original principal
amount of 1 19,909,593.75, are dated April 1, 2001 and were authorized by
Ordinance No.2001-224 of the lssuer passed on March 21,2001 (the
"Ordinance"). ln conjunction therewith, the lssuer has also submitted to me
for approval a Guaranty Agreement dated as of May 1, 2001 (the
"Agreement").

I have examined the law and such certified proceedings and other papers as I

deem necessary to render this opinion,

As to questions of fact material to my opínion, I have relied upon representations of

he lssuer contained ín the certified proceedings and other certificatíons of public offìcials
fumished to me without undertaking to verify the same by independent investigation.

I express no opínion relating to the official statement or any other offering material
relating to the Bonds.

Based on my examination, I am of the opinion, as of the date hereof and under

existing law, as follows (capitalized terms, except as herein defined, have the meanings
given to them in the Ordinance):

(1) The Bonds have been rÊSued in accordance with law and are valìd and
)(
binding special obligations of t

(2) ,F
The Ponds ars equally and ratably.pgygþ¡g fro4 and secured by a lien on
the Pledqed Revenues.

(3) The Agreement conforms to the requirements of law.

Ïherefore, the Bonds are aoproved, and pursuantto the provisíons of cha¿!gl!!
- Governmen@
,f
o;i¡e rs arso approveo.

Qßt, ^- 0o,^o^, of Texas

Att(/ney êeneral of tne
t{o,3€395
Eoor No 2001_8 fltate

posr oFf
tcF Box 12548, Arr\rt\, Trx\5 787 ll 2548 'rFr l5l?\Ár'1 rrnn .vrô
OFFICE OF COMPTROLLER

OF THË STATE OF TEXAS

l, CAROLE KEETON RYLANDER, Comptroller of Public Accounts of the

State of Texas, do hereby ceñity that the attachment is a true and correct copy of the
opinion of the Attomey Generalapproving the:

City of Houston. TexAs. lonvention & EnterÌainment Facilities. Department Hotel

Occupancy Tax and Special Revenue Bonds. Sejes 20018 and certain relate_d
documents. (the "Proceedings")

the bond is numbered AGB-I and.AGBC-1. of the denomination of $ various,

dated April 1. 2001. as authorized by issuer, interest various percent, under and b y
aühority of ì/vfi¡cl¡ said bonds/certificates and Proceedings were registered
electronically h the office of the Comptroller, on the 7th day of May. 2001. under
Regístration Number 641 34.

Given under my hand and seal of otfice, at Austin, Texas, the 7th day of
May, 2001,

MP@ CAROLE KEETON RYLANDER

Comptroller of Public Accounts
of the State ol Texas
OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

t, Melissa Mora, fl Bond Clerk X Assistant Bond Clerk in the office of the Comptroller of the State

of Texas, do hereby certify that, acting under the direction and authority of the Compiroller on the
7th day of May. 2001, I sígned lhe name of the Comptroller to the certificate of registration endorsed

upon the:

City of Hou,ston. Texas. Conventiol & Entertainment Facilities Department Hotel Occupancy Tax
and Special Revenue Bonds. Series 20018 and certain related documents. (lhe "Proceedings'),

the bond is numbered AGB-1 and AGBC-1. dated Apñl 1. 2001, and that in signing the cêrtificate of
regístration I used the g signature:

IN EOF I have this certificate this the 7th day ot tt¡lay. 2001.

l, Carole Keeton Rylander, Comptroller of Public Accounts of the State of Texas, certify that
the person who has sígned the above cedificate was duly designated and appointed by ne under
authority vested in me by Chapter 403, Subchapter H, Government Code, with authority to sign my
name to all certificates of registration, and/or cancellatíon of bonds required by hw lo be regÍstered
and/or cancelled by me, and was acting as such on the date first mentioned in this certificate, and
that the bonds/certificates described in this certificate have been duly registered in the office of the
Comptroller, under Flegistration Number 641 34.

GIVEN under my hand and seal of office at Austin, Texas, this the 7th dav ol h4ay. 2001.

MP@ CAROLE KEETON RYLANDEB

Comptroller of Public Accounts
of the State of Texas
 ofilcE oF T¡lE ATToR\EY GEt t-RÂl Sr¡r¡ Or T¡X¡S

JoHN conNvl.l
May 7,2001

THIS lS TO CERTIFY that the City of Houston, Texas (the "lssuer"),

has submitted to me City_of Houston. Texas. Convention & Entertainment
Facilities Department Hotel Occupançy _ Tax and Sæcial Revenue
Adjustable Rate Bond. Series 2001C-1 .And Citv of Houston. Texas,
Convention & Entedainment Facilities Depa-rtment Hotel 9ccugancy Tax
and Special Revenue Adjustaþle Rate Bond, Series 2001C-2 (the "Bonds")
in the aggregate principal amount of $150,000 for approval. The Bonds are
numbered AGC-1 and AGC-2, are dated April 1, 2001 and were authorized
by Ordinance No. 2001-224 of the lssuer passed on March 21,2001 (the
"Ordinance"). ln conjunction therewith, the lssuer has also submitted to me
for approval a Guaranty Agreement, dated as of May 1, 2001 (the
"Agreement").

I have examined the law and such certifTed proceedings and other papers as I

deem necessary to render this opinÍon.

As to questions of fact materialto my opinion, I have relied upon representations of

the lssuer contained in the certified proceedings and other certifications of public officials
fumished to me without undertaking to verify the same by independent investigation.

I express no opinion relating to the officral statement or any other offering materíal
relating to the Bonds.

Based on my examination, I am of the opinion, as of the date hereof and under

existing law, as follows (capitatized terms, except as herein defined, have the meanings
given to them in the Ordinance):

(1) The Bonds have been issued in accordance with law and are valid and
f
binding special obligations of the lssuer.

f$-P+¡¡s¡p equally and ratably pavable from and secured by a lien on I 'f
the -
1,2)
P]edqed,Revenues.

(3) The Agreement conforms to the requirements of law.

Therefore, the , and pursuant to the provi sions of chapter 1371

of the Govern , the Agreement is also approved.

ùu/^',r- 0o.^,*'
AttïfnetGenerãl ot th{Fiãte ot Îéxas
tb¡o¡sG
Eoot Xo 2OOl-g

Pn"* ^
OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

l, CAHOLE KEETON RYLANDER, Comptroller of Public Accounts of the

State of Texas, do hereby certify that the attachment is a true and correct copy of the
opinion of the Attomey General approving the:

City of Houston, Texas, Convention & Entertainment Facilitigs Department Hotel

Occupancy Tax and Special Revenue Adjustable Rate Bond. Series 2001C-1 and
City of Houston, Texgs. Cqnvention & Enteltaínment Facilities DepaÉment Hotel
Occupancy Tax and Special Revenue Adlustable Rate.Bond. Series 2001C-2 and
certai n related documents. (the " Proceedjn gs")

the bond is numbered AGC-1 and AGC-2, of the denomination of $ various, dated
April 1.2001. as authorized by issuer, interest various percent, under and by
authority of \i/hiú said bonddcertificates and Proceedings were registered
electronically in the otfice of the Comptroller, on the 7th day of May. 2001. under
Registration Number 641 35.

Given under my hand and seal of office, at Austin, Texas, the 7th day of
May. 2001.

CAROLE KEETON RYLANDEH

Comptroller of Public Accounts
of the Stale of Texas
OFFICE OF COMPTROLLER
OF THE STATE OF TEXAS

l, Melissa Mora, fl aonO Clerk [J Assistant Bond Clerk in lhe otfice of the Comptroller of the State

of Texas, do hereby cêrtify that, acting under the directíon and authority of the Comptrolfer on the
7th day of May. 2001 , I signed the name of the Comptroller to the cerlrficate ol registration endorsed

upon the:

City of Houston. Texas. Conv.ention & Entertainment Facilíties Depaßnent Hotel Occupancy Tax
and Special-Revenqe Adiustable Rate Bond. Series 2001C.1 and Citv of Houston. Texas.
Convention & Entertainment Facilities Deparfrru¡nt Hotel Occr.¡pgncv Tax and Special Revenue
Ad¡ustable Râtê Bond. Series 2001C-2 and,cerlain related documenls. (lhe'Proce€dings"),

thebond is numberedAGC-I andAGÇ-2. dated April 1.2001, and that ln signing lhe certificate of
registration I used the signatu

IN EREOF I have this cerlificate this the 7lh day-of May. 2001.

l, Carole Keeton Bylander, Comptroller of Public Accounls of the State of Texas, certity that
the person who has signed the above ceñificate was duly designated and appointed by me under
authority vested in me by Chapter 403, Subchapter H, Governmenl Code, with authority to sign my
name to allcertiticates of regiskation, and/or cancellation of bonds required by hw to be registered
and/or cancelled by me, and was acting as such on the date f¡rst mentioned in this certificate, and
that the bonds/certilicates described in this certificate have been duly reg¡stered in the otfice ol the
Cornptroller, under Flegistration Number 641 3S.

GIVEN under my hand and seal of office at Austin, Texas, this the 7th day ol May. 2001..

CAROLE KEETON BYLANDER

Comptroller of Public Accounts
ol the State of Tèxas
 ÂTToR\EY Gl¡:FR^t Slrt¡ or T¿r¡s
OÍFtcE oF THE
JoH
N ConN YN
62

May 7, 2001 63

M
THIS lS TO CERTIFY that the City of Houston, Texas (the "lssuer"),
has submitted to me Çity of Houston. Texas. Convention & Entertainmgnt 6
Facilities Department Hotel Occupancy Tax and Special Revenue Refundinq
Bond, Series 20014 (the "Bond") in the principal amount of $150,335,000 for
approval. The Bond is dated April 1, 2Q01, numbered AGA-1 and was
authorized by Ordinance No. 2001-224 of the lssuer passed on March 21,
2001 (the "Ordinance"). ln conjunction therewith, the lssuer has also
submitted to me for approval a Guaranty Agreement dated as of May 1,
2001 (the "Agreement").

I have examined the law and such certified proceedings and other papers as I

deem necessary to render this opinion.

'.i As to questions of fact material to my opinion, I have relied upon representations of

lssuer contaíned in the certified proceedings and other certifications of public officials
- _,lhe
furnished to me without undertaking to verify the same by independent investigation.

I express no opinion relating to the official statement or any other offering material
relating to the Bond.

Based on my examination, I am of the opinion, as of the date hereof and under

existing law, as follows (capitalized terms, except as herein defined, have the meanings
given to them in the Ordinance):

(1) The Bond has been issued in accordance with law and is a valid and binding
special obligation of the lssuer.

(2) ln accordance with the provisions of the law, including an Escrow Agreement
dated as of April 1 , 2001, firm banking arrangements have been made for the
discharge and final payment or redemption of the obligations being refunded upon
deposit of an amount sufficient to pay saÍd obligations when due.

(3) The Bond is equalfy and ratably payabfe from and secured by a lien on the
Pledged Revenues.

(4) The Agreement conforms to the requirements of law,

j
''
Therefore, the Bond is approved, and pursuant to the provisions of chapter 1371 of
the Government Code, the Agreement is also approved.
 City of Houston, Texas,Convention & Entertainment Facilities Department Hotel
Occupancy Tax and Special Revenue Refunding Bond, Series 20014
\
-2-

The Comptroller is instructed that she may register the Bond without the
cancellatíon of the underlying securitíes beíng refunded thereby.

A General of the te of Texas

ìþ.æ39¡l
Bæk No.2001-B
rJ(

I
OFF¡CE OF COMPTROLLER

OF THE STATE OF TEXAS

I, CAROLE KEETON RYLANDER, Comptroller of Public Accounts of the

State of Texas, do hereby certify that the attachment is a lrue and correct copy of the
opinion of the Attomey General approving the:

CiW of Houston. Texas, Convention & Entertainment Facilities Department Hotel

Occupancy Taxand Special Bevenue Flefunding Bond. Seri.e_s 20014 and certain
related documents. (the "Proceedings")

the bond is numbered AGA-1 .of the denomination of $ 150.335.000, dated April
1. 2001. as authorized by issuer, interest various percent, under and by authority of
$/h¡cfl said bonddcerlificates and Proceedings were regÍstered electronicalÌy in the
otfice of the Comptroller, on the 7th day of May. 2001, under Registration Number
64133.

Given under my hand and seal of otfice, at Austin, Texas, the 7th day of
May. 2001

CAROLE KEETON RYLANDEB

Comptroller of Pubhc Accounls
of the State of Texas

t
OFFICE OF COMPTROLLER

OF THE STATE OF
TEXAS

I t4e[ssa Mora, I AonC Clerk I Assistant Bond Clerk in the office of the Comptroller of the State

olTexas, do hereby ceflify that, acling under the direct¡on and authority of the Comptroller on the
7th dav of May. 2001, I signed the name of the Comptroller to the certifícate of registration endorsed

upon the:

City ol Houston. Texas, Convention & Entertainm.ent Facilitles Departmênt HotelOccupAncy Tax
snd Special Revenue Refunding-Bond, SerieÈ 20014 and certain related documents. (the
lProceedings"),

lhe bond ís numbered AGA-1 . dated April 1. 2001, and that in signing the certificate of registratíon I

used lhe following

IN I have this certrfícate this the 7th day of May. 2001.

l, Carole Keeton Rylander, Comptroller of Public Accounts of the State of Texas, certify that
the person who has signed the above certificate was duly designated and appointed by me under
authority vested in me by Chapter 403, Subchapter H, Government Code, with authorily to sígn my
name to all certificates of regístration, and/or cancellation of bonds required by hw to be registered
and/or cancelled by me, and was acting as such on the date f¡rst mentioned in lhis certificate, and
that the bonds/certificates described in this certilicale have been duly registered in the otfice of the
Comptroller, under Registration Number 641 83.

GIVEN under my hand and seal of office at Austin, Texas, this the 7th day -of Ma¡¿ 2001.

CAFOLE KEETON RYLANDER

Comptroller of Public Accounts
of the State of Texas
 olt't('rÀr, sr A'¡'l:Mu,N'r D/i laD M^v r0, rms
Nú]W|S5['ES: I}OOI('EN'I'RYONLY R¡tftNGS: Moody'er ",t¡¡'
S&9: "AÀÀ'
Sc:'RA'flN(iS" hcrc¡a

cotn &crsro¡¡ rntcrest m ¡hc 9cæ9 ¿00t4 Dondr ldclì[c¡ bc]ow) w¡ll hc crcludablc t¡onr g¡os uconË ftr fcdcr8l IncÒmc tûx pupo8ct. ùtccpl ar cr¡ilarncd nndcr
'T^X MATIERS .$l-.RlE!l ,0054 BONDS hcrcrn. ¡nd. wrll bc a¡ rtcm of t¡x lìrclercnrÊ fcr ptulxrw¡ of dclmlrrng thç altcorrrvç ¡rnntnilrr ta\ rruporçd q
¡ndtvtduelr¡ndcorFlr¡tpn¡ lnthcoptmørotColtmd(ot¡scl,rnlorçrlontltT¡rablc\enc¡2005Dbonds(dcñnodbclow)¡s¡¡cludrblc¡nBros!/l^trrúlbrfcda¡l
rncõ¡s lôx puTþFi undÊr cxrslrng tbtlll.s, rq¡ulalronr, puhhshrd ruhngÉ hd eut dccr¡ronc Scc "IAX lvlÂTîERS - lAXABLE SERIË9 200Jt| /ONl)S' lßreh
y
crTY oF sAN ÀNTON|O, TIXAS CONVENI'|ON CENTER HOTEI. FTNANCE CORFOnATTON
(r Tcrcs nonprolit lorrl governmrot (oqror¡tiorr rctitrg oa b3hslfofahc City olsrn Anto¡ior Tcrrs)

$129930,00ù $?8¡t5.000
CONTRACT REVENUE EMPOWERMINI ZONE BONDIi. ('ONTRACT REVENI'E NONDS,
SEN,IES 2OO5A (AMT BONDS) 'TAXABLE SERJES 2(IOIB

Ðoted Møy 15,2005, lnterest ¡lccrueßIroñ ('loJrng Date Dae Ás shøt¡t on n¡nle coter
fhe Ctty ofsth AntÒ$o. TE(a! Convcn$on Ç3¡q{lot9!$nrnce Corpratron (rhc "fssr¡tl'}, e Texâs nonFofit loc¡l goveñ¡nÈrt coqñrå$on ñltng on
b€half of ÍærciÇõf s¡n Antoíio. TêxÀs (tFttty"),
rf rsurngìTfil29,9Juiffi'Clntmct Rcven$ Enpowelmcrt Zone Bonds. Soes 2005^ (^MT Boßds)
(lhê -Sstes 20054 Bonds') and rts S78,21 5,000 Çoiìtracr Rcvcnue Bonds, Tax¿blc Sencs 20058 (thc "Tôxable Scncs 2û058 Bonrts"t (collËhvely, rhe SÞnÉ
20054 Bonds ¡nd thê Taxeble Salæ 20058 Bonds are rclèrred to hcrern as ûe "Scn6 2005 Bonds") Thc Sørcs 2005 Bonds arc bcrng rssucd pursusnt to rhe
povtstons ofTcxu law dcssrtbcd høe¡n Àddrlnâlly. thc Selrcs 200JÀ Bonds w¡ll ùc lssucd as "Enpowímall ¿on. Bonds" purfusnt lo fedcr¡l t¡x l¡w
Àlt
of the Scrl!¡ ?005 Bonds w¡ll lrc rssued punuant !o {n lndenturc of Trust (the "¡n.lmtqre") bctwgco the tssu¿r ad ìÀrclls F¡rgo B¡nl(, N /1 . Tex$. as
rrustee (thc "TÌuste") ^usttn.
I hc ywæds of thc Senes 2005 Bonds stll be loared by ths Issulr ro Hottl tnvestrncns, l. P . a D€lrwbre l¡rnlcd pcnoúrshtp(lhc 'Devdoûjr"I pursu¡nl
to a "Lorn Agrcerncnl." ¡o bc t.sed by th. kvcloper to (¡) l¡nånca a ponrcn of ihc cosls tcqutre{t ro destgr¡. dwctop, cànsurær" cqurp. lìrrnlsh an<l o¡x;n a full-
$Ntcê l,0m tuom ho¡cl togcthcr wtlh upro 1.000 parkhg sp¡ccs rn m undcrground fn¡tùB gârags, sub¡cc¡ to lh€ tmrtl of cafr$n ¡lro¡sÆt dorumenlr dcscnbed
hcrctn (lhe "Hot€l ProJccl'). (b) fund ôproxrnutcly 38 months of caprohzed rnçrçs¡ (H/ilr;b ¡5 mrfi¿cd ro cover tlr pcrnd cornmancrng wrh rhr d¡to of
ls¡urrcc of lhc Ss¡ics 2005 Bonds lhfough stx moilhs follolvtng complelron of colsrructron of tlre Hotel PloJEct); (c) ft¡nd a ilòr senicc taserve n¡ùd tor thÊ
Sørcs 200J Boods rn pen wrth thc pùrchÀqe of ¡ resent fund crcd¡t frohry End rn pør wrlh procccds. ald (d) pay €rdâtn eolts of rssu¡ÍE the ùrncs 2ü0t
Bonds ln sddtuor lo thc loancd Ssr¡es 2005 Bond procceds, rhc Horcl ProJect wll be financsl ,í frårl wrh htttil Prefercd Egûty (dÊrcnbqt hcrc¡r) tn thË
amount of377,331200
Th€ ¡{olel Pro]ect wrll be dcvelopcd by thc Devclo¡rcr purrurnt lo ð "Pro;cct Agrccmcnt" bÊtwær tho Crty and thc Developcr a "f)eslgn/BorH
IBTçmcrìt" belwcen the Dæelopcr trd F¡ulkßruSA, LP, r Tcxas hmrted pattncrshrp (rhc'Dørgn/Bullder"), and a'Gunnty- betwecn thc C'rty ond
FaulkncrUSA,lnc,aDelawarccorporatron(the'Guorantor") Thctlolcl Pro¡ectull bcprcrla¡cdforopcnrngbyHyaBCorporåtron itlrc'0¡rcrarot'¡puisuant
to ¡ 'Pro{rud md Dergo AslrllËnæ end PreOpcnrng .Scwrçcs Agrccment" bçlecÊn rhc Opsr8lor ud thc Dtirgrr/Burllci, ¡nd, ¡fìer opening, menuçd anr!
opcf_rted by ùc Opcnlor purs{ánt to a 'Hoþl Mfi¡gçmcnt ¡lßrecmcnt" trcnwcn the Dcvclopcr and thc qËrûtor s¡d û 'Roon Bloctrng Agrcõ¡ncnr" bctwcen
tho Crty and thc Dcvdopcr
Th€ Scrß ?005 Bnnds ull bc rc8rsþr.d ¡nd oflþrcd ¡n demmrnatrons of $5,000 lnd lntcBral ñuhìples thêrËof lnrt¡€st on thë Sçf¡cs 200s Uonrlr wrtt bc
p¡yabl€seillaDnuallyüeschJtnuåry15rndJulyl5,commacrngJulyl5.2005 ThcSenes2fl)5Eondsaresub¡ecttooptronal,mandrtorysrnkrnglunJ,ud
crl¡aordrnåry mendfory redâTFüon ¡.s desc¡lbed hercrn, atc hmrtod obhgalrons of the tssæt, urd rre cqrully and ntably sccurcd by lb€ es€l\ tn thë [¡¡rst
Þ.sL¡lc (def¡ñ€d h€rern) pledgcd undcr the lndcntute

Ite Smes 200J Bonds tnlllally lÈill ttc regrslcrc.d rô lhe ð8mc óf (bdc &. Co e5 reg¡stcrÊd owm snd nonrnee fd Thc lxposttory rrurt ('ornpmy. Ncw
York, New YoÌl ("Drc"). whrch wrll act as sccuntres dcpûsrtory for thË SÉiles 2005 Bonrls Ttrc Scrres 2(F5 Bonds wlt bc risued ¡s bûùk mrr] osly fÒrm,
afiJ holdefs of ¡hè Scrles 200J Bonds wt¡l ool rec€rve physrcrl dchvery of bonds excepl ts dcqcrbc¡l herc¡n l)unog my pcnod in whrch owncrshlp of any of
rhc Scrl€s 2OO5 Bonds ts dslstrrncd only by r book cilry st DTC, rhe Tfùslê€ wrll mflLe pRymentg m such Sm€s 2005 Bonds io DTC N Dlc's t¡)mlncs tn
accordSncÆ wtth &rangffiffts b€tw tìe lrusae ond DTC
Prymcnt of plncrpal of¡nd rntc¡srl on lhs Seflcs ?00J Bonds w¡ll tre rnsursd tn ÂccoÌdaricc w¡lh lhc tsfms ofa tìnrrctrl guar¡n¡v rísur¡nca poltcy t<¡ he
rssucd stmullaneously unth lhc dcLvøy of thç' Scrrer 2005 Bonds by Amùac Assurancc Cuporatron (thÈ 'BÐrd Imurc¡") Scr "FINANCI^L (ìU^RA N1'Y
INSURANCE POLICY AND RESERVE ÍtJND CR"E[)lT t'ACILITf'hc¡crn

ffi
St¡ lb¡ in¡lde covcr psgc for thc Þslrr¡ty æhdlul.r, tntcrcta r¡|tr, lnlll¡l ylÊlds. ¡nrl Ctl:ilP ûrñùcfr
,NI¡S (ÐVER
PAGE CONTAINS CERTATN INÌORIUÂTTON T'OR GENSR,{L REËËRENCE ONLY. N' TS NOI ¡NTENDDD ,T.S A
SUMMARY OF THE TÛRMS OF AND SECURITY FOR THE SDRIË,S 2OOó BONDS. SDE'SECIIRITI AND SOTINCE.\ OF PAYMf,NT }'OR
T'IE SER¡ES IOOS EONI'Si AND "RI.SK FACTORS' HEREIN FON A DTSCU¡iSION OF CERTAIN ÎISK TACTORS TIIAT SIIOTIT.I' BE
CONSIDERED TN CO{INECTION ìVITS AN TTWESTMENT III THE SERIES 2(x}5 8ONDS.
lHE SER,I[,S 2OO5 BONDS \TIT,L NOT (ONST¡TUTE AN TNDDBTEDNBSS (IR GENÍIRAL OAIIGATION OFTIIE ISSUI:R, ITIlì CITV,
EEXAR COUNTy, IllE STATT OF TEXAS, OR ANy OTSER POLtltC^t, StrBDrV[ilON OF THE STATD, OF rEX^S. wrr¡flN ',flrE
rùlDA¡¡lNG OF ANY CONSTTTUTIONÀI. PROVISIOITS OR STATInORY IJMtT^TtOtl ìVHATSOEVDR, BUf TtlE sERlËS 200f BOND$
WII,T, EE I,TMITED SPECIAL OBLIGATIONS OF THE ISSUER PAYABLE FROM TI¡E FT'NDS PROVIDED THEREFOß AS PROVTDED TII
ïITD INDENTUNE, NETTIIDI TIIE FAITH NOR CREDTT OF TI¡E CTIY (OTIIER TI¡AN CERTA¡N CITY TAX REVDNUÈS DD$('ruBEI)
HËRf,lNl', BEXAR COUNTY,TEESTATÊ OF TEXAS,ORANy oTHnn F0l,lTtC/TI,SUBDMSIONOFTHESTATEOFTEXAS ¡S PI,ËDCED
1'O TTIE PAYMENT OF THE PRTNCIPAI, OFTIN: SERTES 2O()5 BONDS OR THE TNIT,REST OR ANY PNEMTI,M TI¡ERÍON OR O'fNEN
(oST INCIDENT TIIERETO, NEITIIDR TIIE MEMBERS OT TTIf, GOVERN¡NG BODY OF THE ISSUER NOR ANY PENSON EXË( lIIINC
THE $ERIE$ ¿OO5 BONDS ìryfLl, BË I,IABT.}ì PI:RSONAII.Y ON THE S¡)RT8.S 2l)OI EONDS BY RNASON OF THE ISSUAN('E I TI]:R[OF,
TIIE ¡S$UER IIAS NO TÁXINC POITF.R
ThcScncs200SBonds¡¡lolfarcdfordchvcry*har.ar rndrftrsucd,srb¡ccttoÉrcqrprorrngopìnrmufthc^flomcyGÊnersl oftho.Staleol'lcrarurlthrlc¡nl
o0rnrunofCo'8o¡dCouffil.ßþthËveltdrryoftherrrMnccofthcSarc¡?fil5Rondsurrlail¡cCuxtrn¡rpn¡¡rdl¡w¡oftl¡Sr¡taolT€ru Ccrtnnlqrolnroncnrrllhe
pæscd on frx thÈ ( rly by rt¡ slrcl¡l co.n*|. 9r¿well ¿ Gruh8nr I I P. Hq*ron. fcxa¡, for rlru t'odcrwntcrs by ûer coÍnrcl, Wnrtcül Sccftrerl & Vrnr(k lt (' . SrD
Allonto lcxts, for t}¡c Bqd ln*rcr þ rte curn*I. DLÀ Prpcr Rudnrrk Oray Cary US t I P. l.icw YorÌ. Ncw Yoù, for tùç GuarMt6 sd thc Df flgn/lloll(ls b! thËü
crunrl, Andrcwe KFlb LLP. tlocrqr, Tcw, fu rhc Derclopr by tls counsl, Boyn¡ & ñtrllcr. p (' llørron Tcxr¡, and fctùc Opcntø by rts counxl I nu ollcc ul
S¡nSml,cc. lcAn6ehs.L'ahfmrl! ThcScær200JllondrurllbcavalaHcfordclrvcrythnngfil)fCo¡orebourJntrçE 2mJ

Citigroup UBS Finsncisl Se¡rriccs lnc.

Pipcr Jrl[rrry & ('0. SÂM(.O ('rpitel Merkcrs SoÈrhwtslcrn Crp¡lrl Mrrkcl\ ln(.
 D¡v¡s¡on of Prnson ¡in¡¡.¡sl Strvl(c\
do under such agreements, but excluding the Unassigned Rights and the right to enforce such nghts; (d) the Deed of
Trust; and (e) any and all property (other than amounts in or required to be deposited in, the Rebate Fund)ofevery
kind or description now or hereafter owned by the lssuer, or which may now or hereafter be sold, transfened,
conveyed, assigned, hypothecated, endorsed, deposited, pledged, mortgaged, granted or delivered to or deposited
with, the Trustce by or on behalf of the lssuer or the City as additional security under the lndenture, or which
pursuant to any of the provisions of the Financing Documents may come into fhe possession or control of tha
Trustee or the Depository Bank, or a receiver lawfully appointed pursuant to the Indenture, as such additional
security, including, without limitation, any payment and performance bonds and completion guaranties obtained by
the Developer, the Desigtt/Builder, or any other Person in favor of the Trustee; and the Trustee is authorized to
receive all such proper¡y as additional security for the payment ofthe Series 2005 Bonds, and to hold and apply all
such property subjcct to the terms of the Indenture, the Economic Developrnent Agreement. and the Cash
Managemenl Agreement.

The Trust Ëstate will be held in lrust by the Trustee for the equal and proportionaþ benefit and securþ of
the Bond Insurer (as the provider of the Financial Guaranty Insurance Policy and thc Series 2005 Reserve Fund
Credit Facility), the City and the R€gistered Owners without preference of any Bond of a Series over any other, but
with such preferences, privileges, priorities, and distinctions among the Series 2005 Bonds as provided in the
Indenture, and for the enforcement of th€ påyment of the Serics 2005 Bonds in accord¡nce witl¡ their tcrms, and lhe
lndenture, and the right of the Cþ to bc repaid for certain City Tax Revenucs paid by th€ C¡ty pursuant to the
Economic Development Agreement and thc Grcund Lease and to rcceive payment of the Bæic Rental, Partioipation
Rental, and all other Rental in accordance with the terms of the Ground Lease, snd the right of the Bond lnsurer to
be repaid fo¡ amounts drawn on the Series 2005 Reserve Fund Credit Facility as set forth in tlre Ambsc Guararrty
Agteement, and all other sums payable undcr the Indenture, on the Series 2005 Bonds, or under the Ground tæase.
Sce "SECURIry AND SOURCES OF PAYMENT FOR THE SERIES 2005 BONDS-Pledge of Trusr Estate" and
"-Economic Development Agreem€nt."

The Issuer and the City will enter into that certain "Economic Devclopment Agtemcnt'(the "Ëconomic
Development Agreemenl"), dated as of May 15,2005, whereby the City will agree to pledge or grånt to the lssucr
the "Cíty Tax Revenues," (defined below) in order to provide security for the payment of debt service on tlre Series
2005 Bonds when due in thc event thât Net Operating Revenues (as defined in APPENDTX B) received by the
Developer fhom the operalion of the Hotel Project due to the lssuer under the Loan Agreement during any month are
insufficient to fully fund the Debt Service Fund for the payment of debt service on the Series 2fi)5 Bonds when due
(subject to the terms of the Economic Developmcnt Agreement), The City Tax Rcvenues will consist of
(a) revenucs derived from the 67o state hotet occupançy tax (th€ "69l/0 State HOT') collected at the Holel Project
during the first ten years after the Hotel Project is open for initial occupancy (the "Convention Center Hot€l Slate
HOT Revenues"); (b) revenues derived from lhe 6.25% slate sales and use tax (the "6.257o State Sales Tax")
collected at tbe Hotel Project, including from all businesses located in the Hotel Project, during the first ten years
afferthe Hotel Proj€ct is open for inilial occupancy (the'Convention Center Hotel Statc Sales Tax Revcnues"); (c)
revcnues dcrived from the 7% loeal hotel occupancy tôx (tho "7olo Local HOT') collecæd at the Hotel Project as
long as any Scries 2005 Bonds (or Refunding Bonds) are outstanding (thc "Convcntion Ccntcr Hotcl 7% Local HOT
Revenues"), subject to such Convention Cenler Hotcl 7olo Local HOT Rcvenues not being required to pay debt
service or other requirements rclated to the Prior Lien Convention Center Bonds or the Subordinate Lien Conv€ntion
Center Bonds; and (d) available revenues derived fn¡m the 2olo expansion hotel occupancy tax (the "2% Expansion
Tax") collected at al¡ hotels in the Cíty as long as any Series 2005 Bonds (or Refunding Bonds) are outslanding (the
"Available 2olo Expansion HOT Revenues"). The City will granf to the Issuer a first lien security interest in the
Convention Center Hotel State HOT Revenues, ¡he Convention Cent€r Hot€l State Sales Tax Revenues, and the
Available 2% Expansion HOT Revenues, and will grônt to the Issucr a subordinatc licn sccurity intcrest in the
Convcntion Center Hotel 7Vo Local HOT Rcvenucs, together with all funds on deposit from time to timc in
accordonce with thc Economic Development Agreement in the Holding Account (as defined in APPENDIX B), the
Convention Center Hotel 1Vo Local HOT Revenues Accoun! the Convention Ccnter Holel State Sales Tax
Revenues Account, and the Convention Center State HOT Revenues Account to the full cxtent that such Revcnues
and Accounts may be subject to the Uniform Commercial Code of the Sþte of Texas. The City will sepera¡ely
account for the four cofnponents of the City Tæt Revenues in separate accounts maintained by thc City. Sce
*SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2005 BONDS-Economic lÞvelopment
Agrcement."

2
 ln anticipation of issuing the Series 2005 Bonds, the city adopted Ordinance No.99284 on JunE 3, 2004
(the "Amendatory Ordinance"), amending Ordinance No. 83735 originalty adopred on Mæch 14, 1996 (collecüvely
the "Prior Lien Convention Center Bond Ordinance") which authorized the iisuance of its "Ciry of San Antonii
Jelas Hotel Occupancy Tax Revcnue Bonds, Series 1996" issued in the original aggr€gate principal amount of
$182'012,480,60, (the "Prior Lien Convenlion Ccnter Bonds") and cunently outstanaing in thiaggrégate principal
amounl of $68,785'000. The purpose of the Amendatory Ordinance ì{as to (a) conform the prioil¡eã Convention
Centor Bond Ordinance with c_unent Texas law regarding the allocation oîthe7o/o l,ocal HOT; (b) allow a pledge on
a prior lien basis of 1.75olo of the TVoLocal HOT allocated pu$uarit to Section 351.103(b), iexas Tax'Codãt (c)
authorize a comrnon ¡esewe ft¡nd for the Convention Cente¡-Bonds (defined below); (dl âllów a pledge on prioi
lien basis of the Available 27o Expansion HOT Revenues for the tímely paymenr of debt service reqiirements " on
obligations issued to finance a hotel for the Convention Center; and (e) limit the City's ability to issu'e prcspective
obligations on a parity with the Prior Lien Convention Ccnrer Bonds. Pursuant to Ordinance No. 99216 and
Ordinance No. Ð2E7, each adopted on June 3,2004 (collectively, the "subordinate Lien Convention Center Bond
Ordinances"), lhe city issued is "City of San Antonio, Texas Hotel occupancy Tax Subordinate Lien Rev€nue
Bonds, Series 20044," curcntly outstanding in the aggregate principal amount of $10,390,000, and its .,Ciry of San
Antonio, Texas Hotel Occupancy Tax Subordinate Lien Revcnue and Rcfunding Bonds, Serics 2fl)48," currently
outstanding in the aggregate principal amount of $l I 1,425,000 (the "subordinatã Lien C'onvention Cenier Bonds;)
(collectively, the Prior Lien Convention Center Bonds and the Subordinate Lien Convention Center Bonds,
aró
refened to herein as the "Convention Center Bond$" and lhe Prior Lien Convention Center Bond ordinance and the
ordinances approving thc Subordinue Lien Convention Center Bonds refened lo herein as lhe .,Convention
Csîter
Bonds ordinances"), for the purpose of refunding â portion of the Prio¡ Lien Convention ceîtcr Bonds and ûo
finance ceilain additional improvcmenls to the Convention Center described in the Amcnded plan.

On April 12, 2fl)5. the EZ Governance Board adopted a rcsolution approving the Horel Project for
-
financing with tax-exempt Empowerment Zone Bonds and recommended that the lssúer issõe up to $130,0{D,000 of
¡ax'exempt Empowcrmcnt Zonc Bonds !o finance all or a portion of thc Hotel Projecr and tùat thc City Council
designaæ and resery9 up to $l30,000,0ü) of thc City's Empowerment Zone Capacity to fìnance all or a potti.rn of
the Hotel Project with tax-exampt Empowerment Zone Bonds.

Pursuant ùo ordinances adopted by the City on April 14, 2005, the City Councit (i) appmved rhe Hotel
!-iurt for Empowerment zone Bond financing; (ii)designated and reserved up to $130,òóo,ooo or rhe c¡ty's
Etnpowerm€nt Zone Capacity to finance a portion of the Hotel Project with tax-excmpt Empowerment Zone Bonds;
(iii)requested and authorizcd thc Issuc¡ to issue up to $130,0ü),000 oftax-cxemptberles Z0O5A Bonds, together
with the Taxable Scries 20058 Bonds, the proceeds of whieh will be loaned to th€ D€veloper and used to proiide a
Poltiotl of the funds required to develop, consln¡ct, equip, furnish, and open rhe Horel fùojecr; (iv) apprôvcd and
authorized all agreements relating b thc Hotel Projcct and the issuance of thc Series 200j Bonds to wtiictr the City
is a party; and (v) approvcd thc form of, and consented to the Issuer entering into all agrccmcnts and ¡nstruments to
which the lssucr is t party in connection with thc issuance of thc Scries 2005 Bonds. On April 28, 2005, the City
Council approved an additional ordinance for the purpose of approving an amcndment lo the P-roject Agre,ement.

Economic Development Program

The City approved an ordin¡nce (the "Program Ordinancc") establishing an economic development
progrem pursuant to chaptÊr 380, Texas Local Government Code, as amonded, for the purpose, among others, of
making loans and granls of public money to promote local economic development and itimulate business and
commercial activity in the City. Pursuant to the Progrem Ordinance, the City approved, by ordinance, the Econonic
Development Agreement (the "Project Ordinance") on April 14, 2005. whereby, the C¡ty agreed to pledge or granr
to lhe lssuer the City Tax Revenues, consisting of the Conven¡ion Center Horel State HOT Revenues, the
Convention Center Hotel State Sales Tax Revenues, the Convention Ccnter Flotel TYol,ocal HOT RevÐucs, and the
Available 2%o Expansion HOT Revenues, in order to provide additional security for the payment of debt service on
thc Scrics 2005 Bonds when duc in the event that Net Operating Revenues rcceived by rhe Dcvcloper from the
operation of the Hotel Project due to the lssuer under the loan Agrecment during any monú arc insuflicient to fully
fund the Debt Service Fund for the payment ol debt servicc due on the Series 2005 Bords (subjcct to the terms of
the Economic Development Agrecmcnt). See "SECURITY AND SOURCES OF PAYMENT FOR THE SERIES
2005 BONDs-Economic Development Agreemenr."

I
Summ¡ryof LiçnsonCityïrxBpvonues, TAÞLE2

convention centcr Horel state Hor Rcvenug! (60/o State HoT collected at Hotcl project)
Cranted to the Series 2005 Bonds as a priority licn (during frrst l0 years aflcr Opening Datc)

Nor available ro be ptedged to Convention Center Bonds

Convention Center Hotel State S-ales Tax Revenues (6.25% State Sales Tax collectÊd ât Hot€l Project)
Granted lo thc Series 2005 Bonds as a priorily lien (during tìrst l0 years after Opening Date)

Not av¡ilable to be pledged to Convenrion Center Bonds

ConveDtion Center Horcl 7% Local HOT Reyenues (?7o Local HOT collccted at Flot€t ProjecÐ
5.25olo plcdged to the Prior Lien Convention Center Bonds as a prior lien(rr
L7596 pledgeÅ to thc Prior Lien Convention Ccnter Bonds as a prior lie#r)
7.Q00/o

5.25% pledged to the subordinate Lien convenrion center Bonds as a subordina¡e lienot
I .75o/o pledged to thc subordinate Lien convention center Bonds as a subordinate lienrtt
7.0V/"

Revenues pledged to lhe Series 2005 Bonds are derived solely from theTo/o Local HOTcotlected at the
Holel Project, and are subordinate to the pledge thereofto the Prior Lien Convention Cer¡tcr Bonds and the
Subordinate Lien Convention Center Bonds

Available 2% Expanslot HOT Revenues

Pledgcd to the Sc¡ies 2005 Bonds as prior lien(r)
Plcdged to the Priority Licn Convcntion Cenrcr Bonds as subordinate lien

Not pledged to Subordinate Lien Convention Cenrer Bonds

'lÌ
r¡l The Prror Llen Convcntton Ccnter Bo¡ds are sccu¡ed by a prror hen on rhe Crty-rerde P/ Local HOT Rçvenues
Thc Subordrnatc l,lcn Convcntton Ccnlcr Bondr arc åurcd by a trcn on thc Crty.wrdc ?.á Loc¡l HOT Rcvenues whrch ls subofdrnåtc to
lhc Len seeunng the Pflor Llcn C'onvenlloo C'ene¡ Bonds
(r) The prior hen on the ,tvarlable 2% [xpansur HOT Revcnucs rs afte¡ takrng tnto consderaùon any lawfully avarlable revenucs rhar may be
utrlucd to pay thc dcbl scrvrcc rcrìutr€mcnts on thc Scrles 2005 Bonds

(Remainder of Page Intentionally Left Blank)

!0
 Generel

The City has determined thal the construct¡on and operation of the Hotel Project will promote local
econom¡c developmenl and will stimulate business and commercial activity in the City. In cons¡derat¡on of
lhese
benefìts, the City and the lssuer have entered into the Economic Development Agreement, whercby the city agrces,
to pledge or grant City Tax Revenues in order to provide security for the paymenì ofdebt service on rhe Seíies 200s
Bonds in the event the Net Operating Revenues are insufficient to pay àli OeUt service on the Serieç 2005 gonds
when due subject to the te¡ms of the Economic Development Agreement as described below.

City Trx Revenues

A ll City Tax Revenues requircd to be transfened by the Cig to the Truslee on behalf of the Issuer pursuant
to thc Economic Development Agreement in the event of ceñain insufliciencíes in arnounts in the Debi Seruice
Fund are payable solely from the follow¡ng revenue sources of the City and in the following order
of priorityl

ÉTr.r/, from Convention Center Holel Stnte HOT Revenues. On or before üe date of opening
of üre Hoæl
ProJecl lhe City will creale e scparete account on the financial records of the City into which-the City
will
deposit all Convention Center Hotel State HoT Revcnues whcn rcceived by rñe City (thc -convcntion
Center Hotel stâte HoT Revenues Accounf'). Any Convention Center Hote¡ State HoT Revenrrcs
on
deposit in the Convcnt¡on Center Hotel State HOT Revenues Account oo the Bus¡ness Day imrncdiately
following the tÞbt Servicc Payment Date occurring in January of each ycar may be transfemcd by the City
out oi rhe Convention Center Hotel State HOT Revcnues Account into any o¡hei acmunt designaLO Uy rhl
Cily. will no longer be considered rc be held or othenryise encumbercd under the r"*t
õf Economic
Development Agrcement, and may be used by the city for any rawfur purpos€:

Second. from Convention Center Hotel Stste Sales Tax Revenues. On or beforc the date of opening
of the
Hotel Project the city will create a s€parat€ accounr on the f¡nancial records of rh€ ciry ¡nto dhich the
City
will deposit oll Convention Center Hotel state sal€s T¡x Rwcnues whon reccivfo Uv ttte C¡rv t¡¡"
*Convention
Centor Hotcl State Sates Tax Revenue¡ Account"), Any Convention Center úotel Statc Sales
Tax Revenucs on dcposit in the Convention Center Hotcl Sùate Sates Tax Rcvcnues Acoount on the
Business Day immediately following the Dcbt Servic¿ Paymart Date occuning in January of each year
may be transferrcd by thc City oul of the Convcntion Center Horcl State Salcs tor Revcnues Account into
any other account desþatcd by tfte City, will no longer bc conside¡ed ro b€ lpld or othcrwisc cncunbcrcd
under the terms of the Economic Development Agreemcnt, and may be used by the City for any hwful
purposc;

'l'hird, f¡om
Convcntion Ccnter Hotel 7o/o L,ocal HOT Rcvcnues. On or bqforc rhc datc of opening of the
Horcl Projcct thc City will creatc a separatc account on the financial rcçords of tho City into whictr úc C¡ty
will deposit all Convcntion Center Hotel 7o/o Local HOT Revenues transfeûcd ty the City punuant ¡9 tú
Economic Development Agreement (the "Convcntion Center Hotel 7% Uocal H-OT Rcvénles Account").
Pursuant to the Convention Ccntcr Bonds Ordinances, the City has est¿blished and mainlains a ñ¡nd known
and defincd therein as the "Gcner¡l HOT Fund" and three sub¿ccounts of the General HOT Fund known
and defìned in the Convention Center Bonds Ordinances æ the "Gcneral Account," the "Ptcdged t.7iolo
Accounl," and thc "Pledged 5.25olo Account." All revenucs fiom ùrr-7o/o Local HOT are r"quirod by ùe
Conveotion Center Bonds Ordinancæ to be deposited as received to the Ceneral HOi Fund and
ímmediately allocated as follows: 25o/o of the 7o/o Local HOT rpvenues to the Pledged l.?5% Account and
75% of the 7o/oLocal HOT revenues to the Pledged 5.25olo Account. All revenues fiom the 7olo Local HOT
on deposit in the Plcdged 1.75olo Account or the Pledged 5.25% Account which ars not rrquired to bc
transfened into funds or accounts established under the Convention Center Eonds Ordinances lo pay debt
service requirements on the Convention Center Bonds or to fund any debt serv¡ce reserve funds rêhted ro
the Convention Center Bonds (the "Excess 7o/o |'ocal HOT Revenues") are permitted by thc Convention
Center Bonds Ordinønoes to be tronsfered to the Debt Service Fund and the Debt Service Reserve Fund
established for the Series 2005 Bonds. On or before the last Business Day of each month, commencing
with the month following the date of initial opening of the Hotol Projecr, the City will derermine (bæed on
information and cenifications provided by the Developer and the Opemtor) the total amount of Convention
('enter Hotel 7o/o Local HOT Revenues collected at the Hotêl Project during the preceding monù and

-t8
transfer such amount from Excess 7o/o Local HOT Revenues into the Convention Center Hotel 7olo l.ocnl
HOT Revenues Account. In the event Excess ?o/o Locrl HOT Revenues are insufficient to fully satisly
such required transfer to the Convention Center Hotel 7o/o Local HOT Revenues Account, the anrount of
such insufficiency will âccrue to the following monlh or months ånd be paid in the same manner during
subsequent months until such amount is fully lransfened to the Convention Center Horel 7olo Local HO'Í
Revenues Account.

The City will transfer Convention Center Hotel 7Yo Local HOT Revenues from the Convention Cenrer
Hotel 7% Local HOT Revenues Account to the Holding Account (as defined herein) from t¡mc ro t¡me as
rcquired by the Economic Development Agreement but only to the ext€nt n€cessary after making any
transfcrs to the Holding Account from the Convention Cenfer Hotcl State HOT Revcnuss Account and the
Convention Centcr Hotcl State Sales Tax Revenues Account as required by the Economic Development
Agreement, Any Convention Ccnter Hotel 7o/o Local HOT Revçnue-s on deposit in the Convention Òenter
Holel 7o/o L¡cal HOT Revenues Account on the Business Day immediately following the Debt Servicc
!.aymenJ
Date occuning in January of each year may be transferred by thè City out of the Conveution
Center Hotel 7o/¡ Local HOT Revenues Account into any other account designaæd by the City. wíll no
longer be considered to be held or otherwise encumbered under the terms of ihe Econ-omic Development
Agreement, and may be used by the City for any lawful purpose; and

þburth, from Available 27o Expansion HOT Revenues. Pursuant to the Convention Center Bonds
,,Expansion
9rdìnances, the City hes established and maintains a fund known and defined therein as the
HOT Fund." All revenues from the 20lo Expansion HOT are required by the Convention Centei Bonds
Ordinances to be deposited as received to the Expansion HOT Fund. ihe City has covenanted in rhe
Convention Center Bonds Ordinances (particularly the Prior Lien Convention Center Bonds Ordinance and
the Subordinate Lien Convention Center Bonds ordinance relating to the Scrics Zfi)44 Subordinate Lien
Convention Center Bonds. and the Subordinate Lien Convention tenrer Bonds Ordinancc relating to the
Series 20048 Subordinate Lien Convention Center Bonds) thar all 2% Expansion HOT RevenueÑill be
deposited as rcceived in the Expansion HOT Fund and transfened on or beiore the fast business day ofeach
month to the following funds in thc following order of priority:

(a) First, to the Prior Lien Bonds Debt Scrvicc Fund in thc amounts and for the uscs
described in the Prior Lien Bonds Ordinance;
(b) Second, to the Debt Service Reserve Fund in the amounts and for rhe uses descrihed in
the Prior Lien Bonds Ordinance;
(c) Third, to the payment of the Subordinate Lien Convention Ccnter Bonds and any
Subordinale Lien Obligations, which term is deemed therein and in the Economic Devetopmenr Agreement
lo include lhe Serics 2005 Bonds to finance the Hotel hoject), including reimbursement obìigations
incuned in conneçlion th€rewilh, and reserve funds relaled thèreto, as may Ù'e required by any ordinance
author¡zing the issuance ofsuch Subordinate Convenrion Center Bondsand'subordinate Lien O6ligations:
(d) Fourrh, to lhe Facilities Fund in the amounts and for the uses describcd in the Prior Lien
Bonds O¡dinance.

NOTIVITHSTANDINC THE FOREGOING, HOWEVER, THE CONVENTION CENTER BONDS

ORDINANCES FURTHER PROVIDE THAT AS OTTEN AS THE CITY WILL DEEM
NECESSARY, BUT AT LEAST ONCE A MONTH ON OR BEFORE THE PENULTIMATE
BUSINESS DAY OF EACH IVIONTH, THE CITY WILL DETERMTNE THE AMOUNTS
NECESSARY FROM THE 2o/o EXPANSION HoT To SATISFY THE FoREcotNc
TRANSFERS, TAKING INTO CONSIDERATTON THE MONEY ACCUMULATÊD AS OF SUCH
DATE IN THE DEBT SERVICE FUNDS ESTABLISHID FOR THE CONVENTION CENTER
BONDS AND THE AMOUNT NECESSARY TO BE TRANSFERRED TO THE DEBT SERVICE
RESERVE FUND ESTABLISHED FOR THE C'ONVENTION CENTER BONDS AS REQUIRED
THEREIN. AT'TER MAKINC THIS DETERMINATION, IN THD EVENT THf, REVENT'ES
FROM THE 2o/o EXPANSION HOT ARE NOT SIIFFICIENT TO SATISFY THE PAYMENT
oBLlGATloNs sET FORTH lN CLAUSES (o) THROUGH (c) ABovE, THE ctTv ts
REQUIRED TO RETAIN IN THE EXPANSION HOT F['ND ANY AMOUNT NECESSARY

59
I {{

&a
W
ArronNpv Gn¡{nRAL oF TBxns
GREG ÀBBOTT

June 8,2005

THIS IS TO CERTIFY that the City of S an fuitonio, Tex as Convention C enter

Hotel Finance Corporahon (the "Issuer") has submrtted to me Citv of San Antoruo.
Texas Convention Center Hotel Finance Corporation Contract ReYenue Bond.
Tæ<ableSeries 20058 (the "Bond") in the principal amount of $78215,000 for
approval. The Bond is dated May 15, 2005. numbered T-1. and was authorized by a
Resolution of the Issuer passed on May 5, 2005 (the "Resolution").

I have examined the law and such certified proceedings and other papers as I deern necessary
to render tÏus opinion,

As to questtons of fact matenal to my opinion, I have rehed upon representatrons of the Issuer
contained in the certified proceedings and other certifications of public officials furnished to me
wrthout undertakrng to verifo the same by rndependent rnvestrgatlon.

I express no opinion relating to any Ofñcial Statement or other offering material relating to the
Bond.

I
have not mvestigated the sufficrency of the secunty for the Bond or the probability of
payment as specified therein, and express no opinion with respect thereto.

Based onmy examination. I am of the opinion. as ofthe date hereof and under existing law. as
follows (caprtahzed terms. except as herein defined, have the meamngs given to them tn the Indenture
of Trust dated as of May 15,2005):

(1) The Bond has been issued in accordance with larv and is a valid and binding limited
special obligation of the Issuer

(21 The Bond is payable from the Trust Estate.

(512)1b1-2100 \\\\\\r Ú¡\r; slArE r,\

PLIrT C)FFlcE BQr 12548, '{Usrlr¡, Ter¡s 78711-:548 rÉL
u5
1ì Lqtal Eñþlo-lñ,t, OplorttD't, Ea\løttr lttnttcl oh ß¡tthl fal't¡
 a I
City of San A¡rtonio. Texas Convention Center Hotel Finance Corporation Contract Revenue Bond,
Taxable Series 20058 - $78,215,000

-Paee2-
(3) Neither the State of Texas, San Antonio, Texas, nor any political corporation,
subdivision, or agency of the State shall be obligated to pay the Bond or interest
thereon and neither the farth and credit nor the ad valorem taring porver of the State of
Texas. the San Antonio. Texas. or any other political corporation. subdivision. or
agency of the State of Texas is pledged to the payment of the pnncipal of, premrum, if
1
''.I any, or interest on the Bond.
,.j

(4) The Holder of the Bond shall never have the right to demand payment of the Bond out
of any funds raised or to be raised by ad valorem taxation.

Therefore, the Bond is approved

of the State of Texas

No .13327
Book No 10058
MAA

:
 OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

l, CAROLE KEETON STRAYHORN, Comptroller of Public Accounts of

the State of Texas, do hereby certify that the attachment is a true and correct
copy of the opinion of the Attomey General approving the:

Citv of San Antonio. Texas Co Center Hotel Finance Comoration

Contract ReYenue Bond. Taxable Series 2005Ë

I
numbered T-1. of the denomination of $ 78,215.000, dated Mav 15. 200-5, as
1

authorized by issuer, interest variqus percent, under and by authority of which

said bonds/certificates were regrstered electronically in the office of the
Comptroller, on the 8th dav of June, 2005, under Registration Number 70065.

Given under my hand and seal of office, at Austin, Texas, the 8th dav of
June.2005.

CAROLE KEETON STRAYHORN

Comptroller of Public Accounts
of the State of Texas
 OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

l, Melissa Mora. l-ì Bond Cterk X Assistant Bond Clerk in the office of the Comptroller of the State

of Texas, do hereby certify that, act¡ng under the direction and authorrÇ of the Comptroller on the
8th dav of June. 200i, I srgned the nâme of the Comptroller to the certificate of registration
endorsed upon the:

Citv of San Antonio, Texas Convention Center Hotel Finance Corooration ContrAct Revenue Bond.
Taxable Series ?0058.

numbered !!, Mav 15, 2005, that rn srgnrng the certfrcate of regrstratron I used the
followrng re:

ì: INW HEREOF I have Sth dav of June, 2005.

l. Carole Keeton Strayhorn. Comptroller of Public Accounts of the State of Texas, certify that
the person who has signed the above certificate was duly desrgnated and appo¡nted by me under
authorrty vested rn me by Chapter 403, Subchapter H, Government Code, wrth authonty to srgn my
name to all certrfrcates of regrstratron, and/or cancellation of bonds required by law to be registered
and/or cancelled by me, and was acting as such on the date first mentioned in this certificate, and
thäi tne bonds/certificates described ln this certificate have been duly registered in the office of the
Comptroller, urrder Registration Number 70065,

GIVEN under my hand and seal of office at Austin. Texas, this the 8th dav of June. 2005

hqt
¿/'il,:i '" '' CAROLE KEETON STRAYHORN
ri
i f ,¿'i,1,1,,(i
Comptroller of Public Accounts
of the State of Texas
 ,.1
Þ

I
&v
W
Artonr.¡rv GpunRA,L oF TBxas
GREG ABBOTT

June 8,2005

THIS IS TO CERTIFY thaf the CitvofSan Antonio. Texas Convention Center

Hotel Frnance Corporatron (the "Issuer") has submitted to me Citv of S-an Antonio.
Ter-ac Ônnr¡enfinn (-p¡ia¡ Éfntol Fi-"¡¡a ñamnrrtin¡ ñnnfianf Þanrcnrre
Empowerment Zone Bond. Series 20054 (the "Bond") in the principal amount of
$ 1 29,930.000 for approval. The Bond is dated May I 5, 2005, numbered T-1, and was
authorized by a Resolution ofthe Issuer passed on May 5 , 2005 (the "Resolution").

I have examined the law and such certiñed proceedings and other papers as I deem necessary
to render tius opiruon.

As to queshons of fact matenal to my oprruon, I have rehed upon representations of the Issuer
contained in the certified proceedings and other certifications of public officials furnished to me
wrthout undertaking to venfu the same by independent investigation.

I express no opinion relating to any Ofñcial Statement or other offering material relating to the
Bond.

I have not mvestrgated the sufficrency of the security for the Bond or the probabrhty of
payment as specified therein. and express no opinion with respect thereto.

Based on my eramination, I am of the opinion, as of the date hereof and under existing law, as
follorvs (caprtahzed terms, except as herein defined" have the meanings given to them in the lndenture
of Trust dated as of May 15, 2005):

(l) The Bond has been issued m accordance with law and is a vahd and binding limited
special obligation of the Issuer.

(2) The Bond is payable from the Trust Estate.

Iìoqr tJFflcb BLr\ 11548, r\usf tr.r. Tr\As 78711-:548 lr.L (5ll)4r'l-1100 \\\\'\\' r.r Át: slArh r\ us
'ln lgttl Ea¡lotntãl O\ltonunry Lñlto-t.î Pttrttd od ßt'¡'lrd l\tptr
 Y"Þ
City of San A¡tonio, Texas Convention Center Hotel Finance Corporation Contract Revenue
Empowerment Zone Bond, Senes 20054 - $129,930,000

-PaeeZ -

(3) Neither the state of Texas, San Antomo, Texas, nor any political corporation,
subdivision. or agency of the State shall be obligated to pay the Bond or interest
thereon and nelther the farth and credit nor the ad valorem taxrng power of the State of
Texas. San Antonio. Texas, or any other political corporation. subdivision. or agency
of the State of Texas is pledged to the payment of the pnncipal of, premrum, rf any, or
interest on the Bond.
)

(4) The Holder of the Bond shall never have the right to demand payment of the Bond out
of any funds raised or to be raised by ad valorem taxation.

Therefore, the Bond is approved.

of the State of Texas

No 4332b
BookNo 10O58
MAA
OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

I, CAROLE KEETON STRAYHORN, Comptroller of Public Accounts of

the State of Texas, do hereby certify that the attachment is a true and conect
copy of the opinion of the Attorney General approving the:

Citv of San Antonio. Texas Convention Center Hotel Finance Corporation

Contract Revenue Empowerment Zone Bond, Series 20054

numbered T-1. of the denomination of $ 129.930.000, dated Mav 15.2005, as

authorized by issuer, interest varioqs percent, under and by authority of which
sald bonds/certrficates were registered electronically in the office of the
Comptroller, on the 8th dav of June. 2005, under Registration Number 70063.

Given under my hand and seal of office, at Austin, Texas, the 8th dav of
June. 2005.

CAROLE KEETON STRAYHORN

Comptroller of Public Accounts
of the State of Texas
 OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

l, Mellssa Mora, I Bond Clerk ffi Assistant Bond Clerk in the office of the Comptroller of the State

of Texas, do hereby certrfy that, acting under the drrectron and authorrty of the Comptroller on the
8th dav of June, 2005, I srgned the name of the Comptroller to the certificate of regishation
endorsed upon the:

Citv of San Antonio, Texas Gonvention Center Hotel Finance Corooration Contraçt Revenue
Ëmoowerment Zone Bond. Seriqs 20054,

numbered ![, and rn srgnrng the cert¡fcate of regrstratron I used the

followrng s

IN I have certificate this the 8th dav of June. 2005.

l, Garole Keeton Strayhorn, Comptroller of Public Accounts of the State of Texas, certify that
the person who has signed the above certificate was duly desrgnated and âppornted by mg urr¿s¡
âuthonty vested rn me by Chapter 403, Subchapter H, Government Code, wrth authorrty to sign my
name to all certfrcates of regrstratron, and/or cancellahon of bonds requrred by law to be registered
and/or cancelled by me, and was achng as such on the date f¡rst mentioned in this certificate, and
thai the'bonds/certificates described in this certificate have been duly registered in the office of the
Comptroll'er, rinder Registration Number 70063.

GIVEN under my hand and seal of office at Austin, Texas, this the 8th dav of June, 2005

| ),
'tllll
t'¿u4lr,¡i¡;rl¡ nr çr'1'
CAROLE KEETON STRAYHORN
'?l Comptroller of Publrc Accounts
of the State of Texas
 OFFICIÀL STATEÌ\,IENT
Dated August 18,2009
Ratings: I\{oody's: {'42'
s&P. rÄ+$
NEW ISSIIE -Book-EntryLonly (Sæ "Other Informafion-Ratings" bereiu)

corporatiolN.

DALLAS COIWENTION CENTER HOTEL DEVELOPil,IENT CORPORÀTION

corporatiol âcting on behalf ofthe City ofDallas, Texas)
(a Texas uonprolit local governmeùt

s74,4t1,t97.20 $388,175,000 $17,235,000

HOTT,L REVENUE BONDS HOTEL REVENUE BONDS HOTEL REVE¡íTIE BONDS
SERTES 2009Á. TÀXABLE SERIES 2OO9B TAXABLE SERIES 2OO9C
(BUILD Aì\ÍERICA BONDS-
DIRECTPÄYMENT)
$62,53û,000 $11,881,197.20
(Currentlnterest (CapitalAppreciatioÌ
Bonds) Bords)
Dated: Date ofDelivery Due: January 1, as shown on inside cove¡.

issuing its $74,41 I,197.20 Hotel Rer.enue Bonds, Saies 20094 (the "SeTies 2009A Bonds'), S388,175,000 Hotel Revenue Bonds, Taxable Series 20098 (Build America Bonds -

"Capital Appreciation Bontls")-

Operating Expense Reseß,e Fund (defined herin); and (f) pay certain costs of issuing the Series 2009 Bonds. A portion of the SeriÊs 2009C Bond proceeds also shall be used to
fundaportionoftheJulyl,20l2inttrestpaymentdueontheSeries20098Bonds. Ses"PLANOFFINANCE-SoucesandUsesofFunds".

and Meeting Space Agreement" betu.een rhe Issuer and the Operator.

herein) pledged under the Indenture, except thaf inteÍest oû tho Serios 20098 Bonds also is payable from direct payments if and when received by the Issuer finm the federal
govemment in accord.lrflce with the "Build America Bonds" program, as further described herein.

The Series 2009 Bonds initially rvill be registered in the name of Clede & Co., as registered orvner and ntlmhee for The Depository Tûst Company, Nerv York, New York

at DTC, tl¡e Trustee will rnake paymenls olr suL'h Series 2009 Boilds to DTL- or DTC's uominee in accordance rvilh anangemenß behveen the Truste€ and DTC.

THIS COVER PAGE CONTAINS CERTAIN- INFORIÍATION FOR GENDR A,L REFERENCE ONLY. IT IS NOT INTENDED ÀS Ä SUl,fr IÀRY OF TH0 TERMS OF
AND SECTruTY FOR THE SERIES 2OO9 BONDS. SEE "SECIIRITY á,ND SOURCES OF PAIî{ENT T'OR TIIE SERIES 2OO9 BONDS" AND ftRISK FACTORS"
IIEREIN FOR A DISCTiSSION OF CERTAIN RISK FACTORS TIIAT SHOTILD BE CONSIDERßD IN CONNECTION WITH AN INIIESTT{ENT IN TIIE SERIES
2009 BONDS.

THE SERIES 2OO9 BONDS WILL NOT CONSTITTITE AN INDEBTEDNESS OR GENER.A.L OBLIGATION OF THE ISST]E& THE CITY, DALLAS COTJNTY, TIIE
STATE OF TEXAS, OR ANY OTIIER POLITICAL SUBDIWSION OF THE STATE OF TEXAS, WITHIN THE ME¡INING OF ANY CONSTITI-TTIONAL
PROVISIONS OR STÄTUTORY LIMITATIONS \TIHATSOE\¿ER, BTIT THE SERIES 2OO9 BONDS WILL BE LITtrTED SPECIÀLOBLIG.A.TIONS OFTHEISST]ER
PÅYABLE SOLELY FROM TIIE FUNDS PROVIDED THEREFOR AS PROVIDED IN TIIE II\ÐENTT]RE. NEITIIER THE FAITH NOR CREDIT OF TIIE CITY
(OTHDR THAN CtrRTAI¡,i CITY TAX REVENUES AI\[D, IF NIADE, APPROPRIATED GRÄNT PAYMENTS DESCRIBED ffiREIN), DALLAS COuli"TY, THE
STATE OF TEXA,S, OR ANY OTHER FOLITICÀL STIBDIVISION OF THE STATE OF TEXAS IS PLEDGED TO THE P.{VT{ENT OF TIIE PRINCIPAI OF THE
SERIES 2OO9 BONDS OR THE INTEREST OR AI.{Y PREMIUM TI{EREON OR OTFER COST INCIDENT THERETO. NEITHER TTM MEMBERS OF TIIE
GOVERNING BODY OF THE ISST]ER NOR ITNY PERSON EXIECTITII{G TIIE SERIES 2OO9 BONDS ItrILL BD LIABLE PORSONALLY ON THE SERIES 2O()9
BONDS BY REASON OF THE ISST]ANCE THEREOF. THE ISSTIER IIAS NO TA)ilNG POWER.

Jeffer, Mangels, Butle¡ & Marmnro L.L.P.; for the City by the Ðallas City Attomeyì for the Underwriters by their counsel, Locke Lord Bissell & Liddell LLP, Dallas, Texas and

President, Balfour Beatty Construotion; for fhe Der.eloper by its counsol, Huntoü & Williarns LLP, Dallas, Texas; and for the Operator by its counsel, Winstead PC and Kutak
Rock LLP. The Series 2009 Bonds will be ¡rnilable for delivery tlrough DTC on or about Septeüber l, 2009.

CITI GOLDMÀN, SACHS & CO. SIEBERT BRANDFORD SÍIÁ,NK & CO, LLC
J.4.CKSON SECURTTIES, LLC RBC CÄPITAL II,ÍARIGTS SOUTHIüEST SECIIRITIES,INC.
CITYTAXREITNUES

The following sources constitute the "City Tax Revenues" to be made available to the Issuer in support ofthe Hotel Project:

All revenues derived frorn the 60lo State hotel occupancy tax collected at the Hotel Project during the first ten years after the Hotel
Proiectisopenforinitialoccupancy, pursuanttoSection351.102(c),TexasTaxCode(the"ConventionCenterHotelStateHOT
Rerænues"); and

All revetrues derived from the 6.25Vo State sales and use tax collected at the Hotel Project, iucluding lìom all businesses located
in the Hotel Project, during the first ten years at-ter the Hotel Proiect is open for initial occupancy, pursuânt to Section 351.102(c),
Texas Tax Code (the "Convention Center Hotel State Sales Tax Revenues")i and

All
revenues derived from the 7o/o City hotel occupancy tax collected at the Hotel Project as long as any Series 2009 Bonds (or
Additional Bonds) are outstarrding, pursuart to Sectiot
35 1.102(b), Texas Tax Code (the "Couventiou Center Hotel TVoLocal
HOT Revenues").

Co\TENANTS

Under the terms of the Econornic Development Agreement, the Cíty covenants as tbllorvs:

While any Series 2009 Bonds or Additional Bonds remain outstanding. the City shall take all steps deemed necessâry to enforce
the City's riglrts under Section 351-102(c), Texas Tax Code, to receive the Convention Center Hotel Stato HOT Revenues and the
Convention Center Hotel State Sales Tax Revem¡es.

While any Series 2009 Bonds or Additional Bonds remain outstanding, the City covenants that (l) it shall continue to levy a hotel
occuparlcy tax on the cost of occupancy of any sleepir-rg room funrished by the Hotel Project, ir which the cost of occupancy ìs
$2.00 or rnore a day, at â râte of at least 7Vo of tbe conside¡atiorr paid by ùe occupant of rhe sleeping room to the hotel, all as
authorized by Chapter' 35 l, Texas Tax Code, and (2) it rvill enfbrce the provisions of auy ordinance lerying a hotel occupancy tax
conceming the collection, remittance and paynrent of such tax.

The City covenants not to take any actions, the effect of which would be to preveût the Issuer or the Trustee from taking any
actions to enforce the obligations of the City to fuird the grant of City Tax Revenues urder the Economic Developrnent
Agreernent.

AccoUNTs FoR Deposrt or Crry TAx REVENUES

The City shall establìsh the follou'ing accourìts:

The "Convention Center Hotel State HOT Revenues Account", into which the Cify shall deposit all Convention Center Hotel
State HOT Revenues wherr received by the Cityl

Tho "Convention Center Hotel State Sales Tax Revenues Accornt", into which the City shall deposit all Convention Center Hotel
State Sales Tax Revenues when received by the City; and

Ïre"Convention Cent€r Hotel 7Vo Local HOT Revenues Accor¡nt". into rvhich the City shall deposit all Coltvention Center Hotel
TVoLocal HOT Revenues when received by the City.

TRANSFERS oF Crry TA-x RE\¡E¡{UES To REvENr.rE FTJND

From and after the Opening Date, on or befbre 10:00 a.rn., Dallas, Texas tirne, on each Lockbox Fund Transfer Date, the City will
ttanstèr to the Trustee in immediately available funds on behalf of the Issue¡ all City Tax Revenues from the Convention Center
Hotel TVo Local HOT Revenues Account, the Convention Center Hotel Sfate HOT Revenues Account and the Convention Center
Hotel State Sales Tax Reveirues Account, in accordarrce with wi¡e irrstructions provided by the Trustee for fl¡rther deposit by the
Trustee into the Revenue Fund.

UNCoNDITIoNAL P¡.vlu,nrs sy rgs CITy

In consideration of the Issuer's agreement to issue the Series 2009 Bonds to fuird a portion of the cost of the Hotel Project the
City agrees that it will pây to the Trustee for the benefit of the Issuer, duríng the teun of the Economic Development Agreement,
as an unoonditional obligation ofthe City (but solely fìom the Cíty Tax Revenues), fhe City Tax Revenues required to be paid
under the terms of tho Economic Development Agreement. regardless of whether the Hotel Project is completed, operable or
operating and notwithstanding fhe suspensíon, intemrption, rednction or curtailment of operatíon of the Hotel Project. The
pâyrnents are not subject to any reduotion, whether offset or othe¡wìse, and a¡e not conditional upon (l) pertbrmance or default by

62
F,
ArronNEv GpNnn¡.1 oF TEx¡s
W
GREG ABBOTT

Septernber l,2009

THIS IS TO CERTIFY that the Dallas Convention Center Hotel

Development Corpcration (the "Issuer") has submitted to me Dallas Convention
Center Hotel Development Corporation Hotel.Revenue Bonds. Series 20094 (the
"Bonds") in the aggregate prinoipal amount of $74,41 I,197.20 for approval. The
Bonds, issued as Current Interest Borrds numbered R-l througb R-9 in rhe aggrËgate
principal åmount of $62,530,000 and as a Capital Appreciation Bonds numbered
RCAB-I through RCAB-3 in the original aggregatÊ prïncÌpal amount of
$ I 1,881,197 .20, arc dåted SeptÊmber 1 , 2009, and were authorized by a Resolution
of the Issuer pûssed on August 18, 2009 (the "Resolutionn).

Ihave examined the law and such certified proceedings and other papers as I deem
necËss¿ry to render this opinion.

As to questions of fact materíal to my opinion, I have relied upon representations of the

Issuer contained in the certified proceedings and other certific.ations ofpublic ofücials furníshed to
me without undertaking to veriff the same by independent investigation.

I express no opinion relating to the ofücial statËm€Nrt or sny other offering material relating
to the Bonds.

Based on my examination, I am ofthe opinion, ãs ofthe date hereof and under existing law,
as follows (capitatized tenns, except as herein defined, have the meanings given to thern in the
Indenture of Trust dated as of August l, 2009 (the "Indenture"):

(1) The Bonds have been issue.d in accordance with law and æe valid and binding
special obligafions of the lssuer.

(2) The Bonds are secured by and payable from the Trust Estate.

(3) ThE owner of the Bonds shallneverhave the righf to demand payment of the Bonds
from any funds raised or to be raised by ta:ration.

Pr)s] Or,r,r<;Í.8oxl?Í4E,Auri'r'tN.'rEXA57S7ll-2548't'r,.L;(J121463-2 100 V/ls$'.(¡,4(;.liT/ì'fË..TX.us

At lit¡aal þ:inlld.ytltti! ÙÌfôttvfli4 Ètnlloyë ' Pfintì¿ êil llttlrkd le¡ff
Datlas Convention Center Hotel Development Corporation Hotel Revenue Bonds, Seríes 20094 -
s71,41r,197.20

-Pase2-

Therefore, the Bonds are approved.

Attorney ofthe State of Texas

No.49516
BookNo.2û094
MÂ.
OFFICE OF COMPTROLLER

OF TIIE STATE OF TÐflS

t, SUSAN GOMBS, Comptroller of Public Accounts of the State of Texas,

do hereby certiff that the attachment is a true and conect copy of the opinion of
the Attorney General approving the:

Dallas Convention Center Hotel Development Corporation Hotel Reyenue

Bonds. Series 20094

numbered R-1/R-9 and RCAÈ1/RCAB-3. of the denomination of $ gllous'

dated Sqptember l. 2009, as authorized by issuer, interest various percent,
under and by authority of which said bonds/oertificates were registered
@,
electronically in the office of the Comptroller, on the
under Reg¡stration Number 7594Í!.

Given under rny hand and seal of office, at Austin, Texas, the 1st iay-of
September 2Q09.

,fuêe SUSAN COMBS

Comptroller of Public AccounF
of the State of Texas
OFFICE OF COMPTROLLER

OF THE STATE OF TÐ(AS

l, Mg!!g-![ora I eonO Clerk [l Assistant Bond Clerk in the office of the Comptruller of the Shte

of Texas, do hereby ceÉiry thet, acting under the direc-tion and authorlty of the Comptroller on the

:lst dav of Septemb€r 2009, I signed the name of the Comptroller to the cenif¡cate of registration
endorsed upon the:

numbered dated Seoþmber 1, 2009, and that in dgning llæ

cerllflcate of registration I used signalure:

¡N WITNESS F have exeq¿ted this this 1 s1daroj Seotember 200 9.

I, Susan Cornbs, Cornptroller of Public Acæunts of the State of Texas, certily that the person

wfio has signed the above oertificaÞ was duly designated and appointed by me under authori$
r¡ested in me by Chapter 4O3, Subdrapter H, Gor¡emment Code, with authori$ to sign my name to

all certificaÞs of registnation, and/or canoellation of bonds required by lafl to be reglslered and/or
cancelled by me, and wae acting as such on the date first mentioned ¡n th¡s cert¡ficate, end that the
bonds/certificates described in his certificate have been duly registered in the office of the
Comptdet under Regisbalion Number 7õ943.

GIVEN under my hand and seal of office at Austin, Texas, this the I st day of Seotember
20æ_

,fu'Ae Susan Combs

Comptroller of Publ'lc Accounüs
of fie State of Texas
F W
^A,rroRNEy GSNERAT oF TEx¡s
GREG Á.BBOTT

September 1,2009

TI{IS IS TO CERTIFY that the Dallas Convention Center Hotel

Developrnent Corporation (the "[ssuer") has submitted to me Dallas Cpnvcnfip,n
Center Hotel Development Corporation Hotel Revenue Bond- Tuable Series 20098
(Build America Bond - Direct Payrnent) (the "Bond") Ín the principal amount of
$38E,175,000 for approval. The Bond is dated September 1,2009, numbered R-1,
and was authorized by a Resolutíon of the Issuer passed on August 18, 2009 (the
"Resolution").

I have examined the.law and such certifid proceedings and other papers as I deem
nÊcessary to render this opinion,

As to questions of faot material ûo my opínion, I have relied upor representations of the

Issuer contained in the certified proceedings and other certifioations of public offrcials fumished to
me without r.urdemaking to vetiff the same by independent investigation.

I express no opinion relating to the ofñcial statement or any other offlering material relating
to the Bond.

Based on my erffimination, I am of the opinion, as of the date heteof and under existing law,
as follows (capitalized terms, except as herein defined, have the meanings given to them in the
Indentuc of Trust dated as ofAugust l, 20û9 (the "Indenture"):

(l) The Bond has bçen issued in accordance with lsw and is valid and binding special
obligation of the Issuer,

Q) The Bond is secured by and payablc from the Trust Estate.

(3) The owner of the Bond shall nÊver have the right to demand payment of the Bond
from ary ñrnds raised or to be raised by tarcation.

Therefore, the Bond is approved.

ofthc Staæ ofTex¡s

No, 495 ¡ 6
Book No. 2009-C
MÁ,

Prlr;'r OFFtcË. BoX 12548. Aust'rN,'f ¡ix¡.s78711-2f 4S 'rur,:(512)46Í-2100 w$iltùl.oAri.s'l'ATE.l'x.trs

At li4aal Iìrt¡lø.yntut O|tortuLitt Ertplo¡rr . PriÌt.¿ cn Rtrydd I¿¡ft
OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

I, SUSAN COMBS, Comptroller of Public Accounts of the State of Texas,

do hereby cÐñtry that the attachment is a true and conect copy of the opinion of
the Attorney General approving the:

Dallas Convention Center Hotel Development Concoration Hotel Revenue Bond.

Taxable Series 20098

numbered R-1. of the denomination of $ 388.175.000, dated Sentember 1. 2009,

as authorized by issuer, interest 7.088 percenl, under and by authority of which
said bonds/certificates were registered eleclronically in the office of the
Comptroller, on the lst dav ot, September 2009, under Registration Number
W.
Given under rny hand and seal of office, at Austín, Texas, the 1st dav of
September 2009.

,e,*û,ú- SUSAN COMBS

Comptroller of Public Accounts
of üÞ State of Texas
OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

l, Ivlelissa Mora, I Bond Clerk I Assistant Eond Clerk in the offtce of the Gompfoller of the $taÞ

of Te)€s, do hercby ceiliry that, acting under the direcfiion and authorlty of the Comptroller on the
1st däy of S€otemb,€r 2009, I signed the name of the Comptroller to the certificate of registratlon
endorsed upon the:

Dgllæ Convention Center Hotel Development Corosation HoÞl Rer¡enue Bond.. Ta¡aable Sefies
20098.

numbered R-1. daþd Spotember 1. 2009, and that in signing the certificate of registration I used the
tollowing signature:

IN WITNESS executed tlis the 1st day,9f September 2009.

l, Susan Combs, Compboller of PuHic Accsunb of the Shte of Texas, ceility that the person
who hes signed lhe above certlllcate was duly designated and appcinted by me under authori$
rcEted in me by Chapter 403, Subchapter H, Gorernment Gode, with authorlty to sign my name to
all certificates of registratíon, and/or cancellation of bonds required by lavrr to be regisbred anüor
cancelled by me, and was acting as such on the date first mentioned in this cerl¡fioate, and that the
bonds/certificates described in this certificate lrave been duly regisbred in the office of the
Gomptroller, under Registnation Number 75944.

GIVEN under rry hand and seal of offlce at Austin, Të¡<as, this the 1sl day of Seotember
2009.

Susan Combs
Cornptoller of Public Accounts
of the Strte of Texas
#A W
Arronury G¡,HEn¡r oF Tnx*s
GREG ^ABBOTT

September 1,2009

THIS IS TO CERTIFY that the Dallas Conventíon Centet Hotel

DeveloprnerÉ Corporation (the "Issuer") has submitted to me Dallas Convention
Center Hotel Development Corpotation Hotel Revenue Bond- Tuable SerÍes 2009C
(the "Bond") in thc aggrçgate principal amount of $17,235,000 for approval. The
Bonds a¡e dated September l, 2009, nrnnbered R-l through R4, mrd were
authorized by a Resolution of the lssuer passed on August 18, 2009 (fhe
"Resolution").

I have examined the law and such certified proceedings ar¡d other papers as I deern
necessafy to render this opinion.

As to questions of fact material to my opinion, I have relied upon representations of the

Issuer contained in the certified proceedings and other certifications of public officíals fi¡míshed to
me \ilithout rurdenaking to verify the same by independent investigation.

I express no opinion relating to the official statement or any other offering material relating
to the Bonds,

Based on my exarnination, I am ofthe opinion, as of the date her€of and under existing law,
as follows (capitalized tenns, exce,pt as herein defined, have the meanings given to them in the
Indenture of Tn¡st dated as of Augrrst 1,2009 (the "IndenÈure"):

(l) The Bonds have been issued in accordance with law and are valid and binding
special obligations of tlre Issuer.

(2) Tlre Bonds arre secwEd by and payable from the Trust Estate.

(3) The ownerof the Bonds shall neverhave the riglrtto demandpayment of the Bonds
from any fi¡nds raised or to be raísed by ta:-ration.

Therefore, the Bonds are approved.

of the State of Texas

No.4951.7
BookNo.2009{
MA.

P()$'t'Ot,r,t(jliB()x1.25{tl,Ar.,s'r'rN.Tr.x^sl87tl-2548 r'Èr.:{5i21461"2100 vww.o^(.;,..i'r'A'¡'}:.'lx.U.\

(]îp¿t¡Lrir! , l'tiilrrd îr [kryltl
'lv l)qul Eu¡[øynrnt b:rnrlqytt l'trptr
OFF¡CE OF COMPTROLLER

OF THE STATE OF TÐ(AS

I, SUSAN COMBS, Comptroller of Public Accounts of the State of Texas,

do hereby certfy that the attachment is a true and correst copy of the opinion of
the Attomey General approving the;

Dallas Convention Center Hotel Develoqment Comoration Hotel Revpnue Bond.

Taxable $eries 2009G

numbered R-1/R:4. of the denomination of $ r¿arlous, dated September 1. 2009,

as authorized by issuer, interest various percent, under and by authortty of which
said bonds/certificates were registered elec,tronically in the office of the
Comptroller, on the 1st dqy of September 2009, under Registration Nurnber
759,Í5.

Given under my hand and seal of office, at Austin, Texas, the lst day of
September 2009.

,4**eú* SUSAN COMBS

Cornpfoiler of Public Accou nts
of tfie State of Texas
OFFICE OF COMPTROLLER

OF THE STATE OF TEXAS

l, Melissa Mora, I Aona Clerk ffi Assisþnt Bond Clerk in the office of the Comptroller of the SEte

of Texaq do hereby certiff that âcting under the direction and authorlty of the Comfidler on the
1st day sf September 2009, I signed the name of the Gomptroller to the certificate of reglstratlon
endolsed upon the:

Dallae Convention CeFbr HoÞl Development Corgoration Hote! Fevanue Bond. Ta¡cable Series
2009c,

numbêred R-l/R-4. dated Seqtember 1. 2009, and that in signing the certificate of registration I

used the following s¡gnature:

IN WTNESS I have executed thie the lst dav of Seotember 2009.

l, Susan Combs, Gomptroller of Pubfic AocounF of the $tate of Texas, certify hat the person
who has signed the above certificate was duly deslgnated and appointed by me under authod$
vested in ma by Chapter 403, Subchapter H, Government Code, witlt auhority to sþn my name b
all certificates of registration, and/or cancellation of bonds required by law to be registered and/or
cancelled by me, and r¡vas acting as such on lhe date flrst mentioned in this certificate, and that thE
bondsicertificates described in this certificats have been duly registered in the office of the
Comptroller, under Registration Number 75945,

GIVEN under my hand and seal of office et Austin, Texas, this the lst day of September
2009.

,fu,M Susan Gornbs

Comptroller of Public Accounts
of the SÞte of Texae