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Tax Law Click here for the full text of this decision FACTS:The appellant, Coastal Liquid Partners L.P., challenges the trial court’s judgment that the appraisal rolls of appellee Matagorda County Appraisal District (MCAD) not be changed. Coastal leases a natural gas liquids storage facility, known as the Markham Facility, located in Matagorda County. The Markham Facility includes two underground salt dome caverns. Coastal leases the storage space within these two caverns from Texas Brine Corporation (Texas Brine). Texas Brine owns the land in which one cavern is located and leases the other cavern from its owner, Lawrence Petersen. To meet Coastal’s storage needs, Texas Brine increased the amount of storage space by leaching additional salt from the two caverns. Coastal is contractually obligated to pay ad valorem taxes applicable to the increased capacity of both caverns, which are listed separately from the surface land on MCAD’s appraisal records. For each of the tax years in question, MCAD, through an engineering firm, appraised the two caverns at a constant value separate from the appraised value of the surface land. From 1995 through 1998, MCAD listed separate appraised values for the caverns under the category of “other.” In 1999, the caverns were listed under the “improvement” category. Coastal filed notices of protest with MCAD for these years. The Matagorda County Appraisal Review Board (ARB) held a hearing on Coastal’s protests. The ARB upheld MCAD’s appraised values. HOLDING:Reversed and remanded. In Harris County Appraisal Dist. v. Coastal Liquids Transp. L.P., 7 S.W.3d 183 (Houston [1st Dist.] 1999) (on rehearing), rev’d on other grounds, 46 S.W.3d 880 (Tex. 2001), the court held that “natural, underground storage caverns are not improvements, and therefore, are not subject to an appraisal separate from the surface land.” Coastal contends MCAD’s listing and appraisal of Coastal’s salt domes, separately from the land on the surface, constitutes unlawful multiple appraisal of the land. MCAD asserts the Houston case simply holds that salt-dome storage caverns are not an “improvement” to the land, see Texas Tax Code ��1.04(2)(B), 25.02(a)(6), but does not hold that the caverns must be appraised and taxed as surface “land.” More importantly, MCAD points out that the Houston case does address whether such caverns are separately taxable as an estate or interest in land. The court concludes that the Houston court’s characterization of salt-dome storage caverns as “natural,” is inapposite. The Houston court relied on the distinction between salt-dome storage caverns and any equipment associated with them, drawn by the natural resources code, to determine that the caverns are not improvements. Title 11 (Miscellaneous Uses of Natural Resources), chapter 211 (Hazardous Liquid Salt Dome Storage Facilities) of the natural resources code defines a “salt-dome storage facility” as “any new or existing salt formation or bedded salt formation storage cavern and any equipment, facility, or building used or intended for use in the storage of hazardous liquid in the salt formation cavern.” This definition does not persuade the court to conclude that salt-dome storage caverns are necessarily natural. The court agrees with the Houston court that these caverns do not fit the tax code’s definition of an “improvement.” These caverns do not require a separate tax assessment from the surface land as an estate or interest in land. OPINION:Yanez, J.; Yanez, Castillo and Garza, JJ.

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