Background
In 2023, the Texas Legislature enacted Senate Bill 2038, which permits residents and landowners to obtain the release of land from a municipality’s extraterritorial jurisdiction, or ETJ. Release may occur through a qualifying petition or an election, and the statute provides that qualifying land is released by operation of law if the municipality does not act within the prescribed period.
Twenty-five cities and a municipal development district sued the State and state officials, contending that SB 2038 conflicted with other Texas law and violated several provisions of the Texas Constitution. The trial court granted the defendants’ plea to the jurisdiction and dismissed the claims without prejudice. The municipalities appealed, arguing that they had standing and had pleaded valid claims sufficient to overcome sovereign immunity.
The Court’s Holding
The Fifteenth Court of Appeals affirmed. It held that the plaintiffs had not pleaded a facially valid statutory or constitutional claim that would invoke the Uniform Declaratory Judgments Act’s limited waiver of sovereign immunity. Because immunity was dispositive, the court did not decide whether the plaintiffs had standing.
The court rejected the contention that SB 2038 conflicted with Local Government Code Section 42.023’s general consent requirement for reducing an ETJ. It also found no facially valid claim based on home-rule authority, unconstitutional delegation, vagueness, inadequate process, equal protection, impairment of contracts, the prohibition on local or special laws, or the Texas Constitution’s Gift Clauses. The court further concluded that the jurisdictional plea encompassed the intervening cities’ claims and that dismissal without prejudice did not require an opportunity to amend first.
Key Takeaways
- SB 2038’s petition and election procedures provide independent methods for releasing land from a municipality’s ETJ without the municipality’s consent.
- Allowing landowners to choose between municipal and county regulation does not delegate legislative authority because SB 2038 gives them no regulatory power or public policymaking duty.
- The municipalities’ development agreements remained binding and judicially enforceable, so the pleaded facts did not show that SB 2038 substantially impaired contractual obligations.
Why It Matters
The decision leaves Texas municipalities unable to pursue this declaratory-judgment challenge against the State on the theories pleaded. It reinforces that a plaintiff seeking to avoid sovereign immunity must allege a facially viable statutory or constitutional invalidity claim, not merely disagreement with the Legislature’s policy choices.
The ruling also confirms that SB 2038’s ETJ-release mechanisms operate despite the preexisting statutory consent provision, strengthening landowners’ ability to remove qualifying property from municipal extraterritorial regulation.