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Click here for the full text of this decision FACTS:The taxpayer Coastal Liquids Partners, LP challenged the Matagorda County Appraisal District’s valuation of the Hiltpold #1 and Hudson #3 caverns at almost $2 million in value for the tax years 1996 through 1999. The trial court granted judgment for the District, but the court of appeals reversed, finding the caverns could not be appraised separately from the surface above them. HOLDING:Reversed and remanded. Since 1995, a person leasing property who is contractually obligated to reimburse the owner for ad valorem taxes can protest an appraisal in the owner’s place. It is undisputed that Coastal’s lease of these caverns from Texas Brine Corporation contains just such an obligation. But the statute allows only one protest; the owner and the lessor cannot both do so. Treating the district’s jurisdictional challenge as one attacking the legal sufficiency of the evidence to support the trial court’s judgment, the court holds that the district failed to prove as a matter of law that there were duplicate protests concerning the same property. The storage caverns here were not awaiting future development; they were and had been in active commercial use, separate and apart from whatever uses were taking place on the surface above. Evidence at trial indicated Coastal pays almost $500,000 annually to rent and use the caverns created to store liquid hydrocarbons, and contractually agreed to pay any ad valorem taxes associated with them. Assessing these caverns separately from the surface does not burden any unsuspecting farmers or ranchers with tax liability for an asset unlikely to be exploited. Coastal also argues that the District’s listing of the storage caverns as “Improvements” for 1999 and as “Other” for previous tax years must be presumed to be double taxation. Coastal argues that 1. the Property Tax Code requires property to be appraised in one of six mutually exclusive categories; 2. the only category applicable to these storage caverns is “land;” and thus 3. the additional categories used here must be double taxation as the caverns were already included in the “land” assessment. The court disagrees with each of these arguments. OPINION:Brister, J., delivered the court’s decision.

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