J-W Power Company v. Irion County Appraisal District

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

ON REMAND

NO. 03-21-00005-CV

J-W Power Company, Appellant

v.

Irion County Appraisal District, Appellee

FROM THE 51ST DISTRICT COURT OF IRION COUNTY

NO. CV19-008, THE HONORABLE CARMEN DUSEK, JUDGE PRESIDING

OPINION

J-W Power Company appeals the trial court’s summary judgment, in which the

court ruled that J-W Power take nothing on its suit for judicial review of the denial of its motion

to correct county appraisal rolls for tax years 2015 and 2016. See Tex. Tax Code § 25.25(c)

(providing for motions to correct appraisal rolls).1 But because appellee Irion County Appraisal

District (ICAD) was entitled to judgment as a matter of law on both grounds raised by J-W Power’s

Section 25.25(c) motion, we affirm.2

1

This case is on remand from the Supreme Court of Texas. See generally J-W Power Co.

v. Sterling Cnty. Appraisal Dist., 691 S.W.3d 466 (Tex. 2024), rev’g 684 S.W.3d 488 (Tex. App.—

Austin 2022).

2

All statutory references below with the construction “Section x” or “Subsection y” are to

provisions in the Tax Code.

BACKGROUND

J-W Power owns natural-gas compressors that it leases to customers for use in

oil-and-gas fields. Its customers use the compressors in counties throughout Texas, but when one

of its compressors is not under lease, J-W Power, as relevant here, keeps the compressor at a

storage yard in Ector County. During the tax years at issue, J-W Power leased compressors to

customers who used them in Irion County. Tax Code sections 23.1241 and 23.1242, as amended

effective January 1, 2012, provide generally that items leased from a “dealer’s heavy equipment

inventory” may be appraised for taxation only in the county in which the inventory is based and

maintained. See Act of May 21, 2011, 82d Leg., R.S., ch. 322, §§ 1–10, 2011 Tex. Gen. Laws

938, 938–41; EXLP Leasing, LLC v. Galveston Cent. Appraisal Dist., 554 S.W.3d 572, 581–86

(Tex. 2018). J-W Power argues that it was at all times relevant a dealer with a “dealer’s heavy

equipment inventory” (DHEI).

Even after Sections 23.1241 and 23.1242 were passed by the legislature and

approved by the governor, Irion County authorities appraised J-W Power’s compressors located in

Irion County. J-W Power protested the appraisals under Section 41.41. The Irion County appraisal

review board denied the protests, and J-W Power did not challenge the denials in court.

In early 2018, the Supreme Court of Texas issued EXLP Leasing, which explains

how Sections 23.1241 and 23.1242 work. See 554 S.W.3d at 572. J-W Power then filed with

the appraisal review board a motion under Section 25.25(c)(2) and (3) to correct the county’s

appraisal rolls for tax years 2015 and 2016. It argued that under EXLP Leasing’s analysis of

Sections 23.1241 and 23.1242, the Irion County authorities should not have appraised any of J-W

Power’s compressors in Irion County because they were all part of a DHEI “based and maintained”

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in Ector County and that thus only Ector County authorities could appraise the compressors. See

id. at 574–75, 581–86.

After a hearing, the appraisal review board denied J-W Power’s Section 25.25(c)

motion. J-W Power appealed the denial via this suit for judicial review against ICAD. ICAD

answered and moved for a summary judgment on all J-W Power’s claims. For its part, J-W Power

moved for a partial summary judgment on, among other things, the two grounds that it had raised

in its Section 25.25(c) motion—one under Subsection (c)(2) and one under Subsection (c)(3).

After responsive filings by each side, the trial court denied J-W Power’s motion, granted ICAD’s,

and rendered a final take-nothing summary judgment for ICAD, specifying only that “all relief to

the Plaintiff” was “being denied.”

On original submission of the appeal, we concluded that ICAD’s res judicata

ground was alone sufficient to affirm the trial court’s summary judgment. In doing so, we erred

to conclude that the earlier denials of J-W Power’s Section 41.41 protests had preclusive effect on

its later Section 25.25(c) motion despite Section 25.25(l). See J-W Power Co. v. Sterling Cnty.

Appraisal Dist., 691 S.W.3d 466, 468–69 (Tex. 2024). The Supreme Court of Texas reversed our

opinion and judgment on that basis and remanded this case to us for further proceedings, to involve

the “several other arguments in [ICAD]’s motion[] for summary judgment.” See id. at 474.

APPLICABLE LAW

Located in the Tax Code, the Property Tax Code governs the appraisal of personal

property and assessment of ad valorem taxes on the appraised property.3 See Tex. Tax Code

3

In the Code, “‘[p]ersonal property’ means property that is not real property.” Tex. Tax

Code § 1.04(4).

3

§§ 1.01–.02, 11.01, 23.01–.9808, 25.01, 26.01; see generally id. §§ 1.01–43.04 (entire Code).

Generally speaking, the Code assigns the task of appraising personal property to county appraisal

districts, which are led by chief appraisers. See id. §§ 6.01–.05, 23.01–.9808. The Code typically

requires appraising personal property for its market value using one of a few generally accepted

computation methods to determine that value. See EXLP Leasing, 554 S.W.3d at 577 (explaining

Tex. Tax Code §§ 23.01, 23.011–.013). “The code then supplements these baseline valuation

methods with a bevy of ‘special appraisal provisions’—an entire subchapter’s worth—establishing

different valuation rules and formulas for discrete categories of property.” Id. (explaining Tex.

Tax Code §§ 23.11–.26). One such special appraisal scheme concerns DHEI. See Tex. Tax Code

§§ 23.1241–.1242; EXLP Leasing, 554 S.W.3d at 577–78.

After an appraisal district completes its appraisal tasks, usually by around mid-May

every year, and after the county’s appraisal review board resolves any relevant protests, the chief

appraiser by around late July certifies to the relevant taxing units appraisal rolls of the property

subject to taxation by each unit. See Tex. Tax Code §§ 25.01, 25.24, 26.01, 41.12; J-W Power,

691 S.W.3d at 471. The taxing units use the certified appraisal rolls when budgeting and setting

annual tax rates. See Tex. Tax Code §§ 26.01–.18.

An owner seeking to change an appraisal district’s treatment of the owner’s

property has at least two statutory options—a Section 41.41 protest or a Section 25.25(c) motion,

both of which are submitted to the relevant appraisal review board. See id. §§ 25.25(c), 41.41;

J-W Power, 691 S.W.3d at 470. “Although Chapter 41 protests ‘are broad in scope and weigh[ted]

in favor of the property owner,’ they are also ‘subject to strict time limitations.’” Oncor Elec.

Delivery Co. NTU, LLC v. Wilbarger Cnty. Appraisal Dist., 691 S.W.3d 890, 895 (Tex. 2024)

(quoting Willacy Cnty. Appraisal Dist. v. Sebastian Cotton & Grain, Ltd., 555 S.W.3d 29, 40 (Tex.

4

2018) (op. on reh’g)). “Generally, the property owner must lodge a section 41.41 protest no later

than 30 days after receiving notice of the appraised value, or before May 15, whichever is later.”

J-W Power, 691 S.W.3d at 470 (citing Tex. Tax Code § 41.44(a)(1)). “The Code lists several

specific grounds for a section 41.41 protest, plus a catch-all provision.” Id. at 470–71 (discussing

Tex. Tax Code § 41.41(a)(1)–(9)).

Much more limited in what the property owner may challenge are Section 25.25(c)

motions, by which owners may seek “changes in the appraisal roll for any of the five preceding

years to correct” only a few kinds of errors. See Tex. Tax Code § 25.25(c); J-W Power,

691 S.W.3d at 471. These motions deal with correcting the already completed appraisal rolls:

“Section 25.25 ‘allows corrections after the time to protest has expired and appraisal rolls have

been approved,’ but ‘[s]uch corrections can be made only under limited circumstances.’” Oncor

Elec. Delivery Co. NTU, 691 S.W.3d at 895 (quoting Sebastian Cotton & Grain, 555 S.W.3d

at 40). Two kinds of errors that a Section 25.25(c) motion may seek to correct are “multiple

appraisals of a property in that tax year” and “the inclusion of property that does not exist in the

form or at the location described in the appraisal roll.” See Tex. Tax Code § 25.25(c)(2), (3).

An owner may appeal an appraisal review board’s denial of the owner’s

Section 25.25(c) motion to district court. See id. § 42.01(a)(1)(B). The appeal is a suit for judicial

review against the appraisal district, and the standard of review in the suit is trial de novo, with the

district court “try[ing] all issues of fact and law raised by the pleadings in the manner applicable

to civil suits generally.” See id. § 42.23(a); Oncor Elec. Delivery Co. NTU, 691 S.W.3d at 896.

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STANDARD OF REVIEW

We review a district court’s summary judgment de novo. Bastrop Cent. Appraisal

Dist. v. Acme Brick Co., 428 S.W.3d 911, 915 (Tex. App.—Austin 2014, no pet.). Because, here,

the trial court in its summary judgment did not specify why it granted ICAD’s motion and denied

J-W Power’s, J-W Power on appeal must negate each ground on which the summary judgment

could properly have been based. See Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 226

(Tex. 2022).

“Summary judgment is proper when no genuine issue of material fact exists and

the movant is entitled to judgment as a matter of law.” Angel v. Tauch, 642 S.W.3d 481, 488 (Tex.

2022). “When reviewing a summary judgment, we take as true all evidence favorable to the

nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant’s

favor.” Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When, as here, both

sides move for a summary judgment on the same issues and the trial court grants one side’s motion

and denies the other’s, we “consider[] the summary judgment evidence presented by both sides,

determine[] all questions presented, and if [we] determine[] that the trial court erred, render[] the

judgment the trial court should have rendered.” Id.

When a defendant moves on the plaintiff’s claim, the defendant is entitled to

summary judgment if it conclusively negates at least one element of the claim. See Tex. R. Civ.

P. 166a(b), (c); Little v. Texas Dep’t of Crim. Just., 148 S.W.3d 374, 381 (Tex. 2004). If the

defendant carries its initial summary-judgment burden, then the burden shifts to the plaintiff to

produce evidence creating a genuine issue of material fact on the contested element. See Zeifman

v. Nowlin, 322 S.W.3d 804, 807 (Tex. App.—Austin 2010, no pet.). “A genuine issue of material

fact exists if the nonmovant produces more than a scintilla of evidence establishing the existence

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of the challenged element.” Id. “More than a scintilla of supporting evidence exists if the evidence

would allow reasonable and fair-minded people to differ in their conclusions.” Id. No more than

a scintilla of evidence exists “when the evidence is ‘so weak as to do no more than create a mere

surmise or suspicion’ of a fact.” See id. (quoting King Ranch, Inc. v. Chapman, 118 S.W.3d 742,

751 (Tex. 2003)).

DISCUSSION

J-W Power in its suit for judicial review challenges the denial of its Section 25.25(c)

motion to correct the appraisal rolls for tax years 2015 and 2016. It argued in its motion that

compressors it owned and leased to others should not have been on the appraisal rolls because the

compressors were part of a DHEI based and maintained in Ector County and thus not taxable by

Irion County authorities, under EXLP Leasing. See 554 S.W.3d at 583–86.

The statutory grounds under which J-W Power pressed this argument were that the

appraisal rolls caused “multiple appraisals of” the compressors in the relevant tax years, under

Section 25.25(c)(2), and that the rolls included “property”—the compressors—“that does not exist

in the form or at the location described in the appraisal roll,” under Section 25.25(c)(3). See Tex.

Tax Code § 25.25(c)(2), (3). We hold that ICAD was entitled to judgment as a matter of law

because the summary-judgment record conclusively negates at least one element of each of J-W

Power’s Section 25.25(c)(2) and (c)(3) positions.

Section 25.25(c)(2)—Multiple Appraisals

J-W Power argues that its compressors were subject to multiple appraisals under

Section 25.25(c)(2) because its compressors listed on Irion County’s appraisal rolls for tax years

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2015 and 2016 were also appraised in Ector County.4 This ground depends on an appraisal of the

compressors at issue in Ector County via appraisal of J-W Power’s inventory of compressors.5

As for activity in Ector County, the summary-judgment evidence includes (a) the

annual DHEI declarations that J-W Power filed with the Ector County chief appraiser6; (b) the

monthly DHEI tax statements that it filed with the Ector County tax collector, showing compressor

rental revenues and the purported unit property tax for those leased compressors7; and (c) the

property-tax payments it made to Ector County taxing units for the tax years in question. J-W

Power’s vice president swore in affidavits that these payment records were the “[c]over letter,

check, and tax bill records for taxing units in Ector County” and that they were J-W Power’s

“payment for the inventory taxes on its inventory pursuant to section 23.1242 of the Texas Tax

4

Otherwise, to the extent that J-W Power argues that Irion County authorities appraised

the compressors and Ector County authorities should have but did not appraise the compressors,

we reject that this scenario would constitute “multiple appraisals” by the taxing authorities.

See Tex. Tax Code § 25.25(c)(2). To constitute multiple appraisals of a compressor, there must

be more than one appraisal of the compressor. See Fort Worth Transp. Auth. v. Rodriguez,

547 S.W.3d 830, 838 (Tex. 2018) (“We read statutes contextually to give effect to every word,

clause, and sentence, because every word or phrase is presumed to have been intentionally used

with a meaning and a purpose. Words not statutorily defined bear their common, ordinary meaning

unless a more precise definition is apparent from the statutory context or the plain meaning yields

an absurd result.” (internal citations omitted)); cf. Bosque Disposal Sys., LLC v. Parker Cnty.

Appraisal Dist., 555 S.W.3d 92, 97 (Tex. 2018) (“[W]e do not presume double taxation merely

because it is semantically possible to include one valuable aspect of the property in two different

appraisal accounts. Instead, ‘evidence about what property was or was not included’ in each

appraisal account should be consulted to determine whether double taxation has in fact occurred.”

(quoting Matagorda Cnty. Appraisal Dist. v. Coastal Liquids Partners, L.P., 165 S.W.3d 329, 336

(Tex. 2005))).

5

In neither its Section 25.25(c) motion, its live pleadings in the trial court, nor its

summary-judgment filings has J-W Power raised any issue about whether Ector County authorities

appraised the particular compressors that Irion County authorities appraised not as an inventory

but only as individual compressors.

6

See Tex. Tax Code § 23.1241(a)(4), (f).

7

See Tex. Tax Code § 23.1242(a)(3), (b), (e), (f), (i).

8

Code.” J-W Power’s motion for partial summary judgment says similarly that the payment records

showed that: “J-W Power tendered payments during each relevant tax year to the taxing authority

in Ector County, the yard county where J-W Power assigned and maintained its inventory of

compressors that included those physically located in Irion County on January 1 of each tax year

at issue”; “J-W Power tendered payment on its DHEI in Ector County as required by

section 23.1242 of the Texas Tax Code”; “ICAD’s unlawful appraisal has resulted in multiple

appraisals of J-W Power’s DHEI in multiple counties”; and “J-W Power reported and was assessed

and paid taxes on its DHEI in Ector County, the proper situs for the property, for each tax year

at issue.”

The summary-judgment evidence also includes a 2020 affidavit by the Ector

County chief appraiser. She described J-W Power’s accounts with the county’s appraisal district:

Ector County Appraisal District account number 99200.42511.00000 is a business

personal property account in the owner name of J-W Power Company, and has been

so at all times since its creation. It has never been a dealer heavy equipment

inventory account and has not encompassed any value from leased compressors.

Ector County Appraisal District created a heavy equipment dealer inventory

account in the name of J-W Power Company in 2013, account number

99502.42511.00000.

J-W Power’s annual DHEI declarations and monthly DHEI tax statements uniformly reference

account 99502.42511.00000—the DHEI account with the Ector County Appraisal District.

But the payment records reference only account 99200.42511.00000—the

non-DHEI, personal-property account. The summary-judgment evidence thus shows that the only

tax bills sent by Ector County authorities to J-W Power, and the only payments that J-W Power

made to Ector County authorities, were for the non-DHEI account. Yet for the proper authorities

to appraise DHEI under the special statutory scheme, the authorities need have received the

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owner’s prepayment, determined the applicable tax liability, applied to that amount the owner’s

prepayment, and then billed the owner for any deficiency or credited the owner for any

overpayment. See Tex. Tax Code § 23.1242(a), (b), (c), (h); EXLP Leasing, 554 S.W.3d at 583–

84. The summary-judgment evidence proves that no such process occurred here—Ector County

authorities appraised, and J-W Power paid for, only non-DHEI personal property. See Bosque

Disposal Sys., LLC v. Parker Cnty. Appraisal Dist., 555 S.W.3d 92, 97 (Tex. 2018) (“[W]e do not

presume double taxation merely because it is semantically possible to include one valuable aspect

of the property in two different appraisal accounts. Instead, ‘evidence about what property was or

was not included’ in each appraisal account should be consulted to determine whether double

taxation has in fact occurred.” (quoting Matagorda Cnty. Appraisal Dist. v. Coastal Liquids

Partners, L.P., 165 S.W.3d 329, 336 (Tex. 2005))). Thus, there was no appraisal by Ector County

authorities of J-W Power’s compressor DHEI.

Nor do the annual DHEI declarations and monthly DHEI tax statements raise any

genuine issue of material fact about whether Ector County authorities appraised the compressors.

The declarations and monthly statements are but “precursors” to the proper authorities’ appraisal

tasks under the special appraisal scheme for DHEI. See Tex. Tax Code §§ 23.1241–.1242; EXLP

Leasing, 554 S.W.3d at 583–84. Owners file the annual declaration, and they file the monthly

statements along with a prepayment of tax on the DHEI. See Tex. Tax Code §§ 23.1241–.1242;

EXLP Leasing, 554 S.W.3d at 583–84. Only afterward do the authorities then assess the tax burden

attributable to the DHEI; apply the prepayments toward that amount; and either credit or bill the

owner further, as necessary. See EXLP Leasing, 554 S.W.3d at 583–84. Only after “the taxing

unit prepares the annual tax bill,” see id. (citing Tex. Tax Code § 23.1242(h)), has the appraisal

district conducted the appraisal task called for by the DHEI special appraisal scheme, see id. at

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577. J-W Power in its reply brief refers to its annual declarations as the “appraisals” in Ector

County, but that position cannot withstand the statutory language8 or EXLP Leasing. The annual

declarations and monthly tax statements here thus do not raise a fact issue about whether Ector

County authorities took the downstream step of appraisal.

Because the summary-judgment evidence conclusively proves that there was no

Ector County appraisal of the compressors that Irion County authorities appraised, J-W Power’s

Section 25.25(c)(2) “multiple appraisals” ground was negated, and ICAD is entitled to judgment

as a matter of law on that ground.

Section 25.25(c)(3)—“Form or Location”

J-W Power’s alternative ground for its Section 25.25(c) motion was that the Irion

County appraisal rolls included “property”—the compressors—“that does not exist in the form or

at the location described in the appraisal roll.” See Tex. Tax Code § 25.25(c)(3). This Court’s

precedent forecloses J-W Power’s position under Section 25.25(c)(3).

8

The owner’s preparation and filing of annual declarations and monthly statements are

tasks different from the taxing authorities’ preparation of the tax bill and further billing or crediting

based on the prepayments. Compare Tex. Tax Code § 23.1241(f) (“Except as provided by

Section 23.1242(k), not later than February 1 of each year, or, in the case of a dealer who was not

in business on January 1, not later than 30 days after commencement of business, each dealer shall

file a declaration with the chief appraiser and file a copy with the collector.”), and id. § 23.1242(f)

(“On or before the 20th day of each month, a dealer shall file with the collector the statement

covering the sale, lease, or rental of each item of heavy equipment sold, leased, or rented by the

dealer in the preceding month.”), with id. § 23.1242(h) (“A taxing unit shall, on its tax bill prepared

for the owner of a dealer’s heavy equipment inventory, separately itemize the taxes levied against

the dealer’s heavy equipment inventory. When the tax bill is prepared for a dealer’s heavy

equipment inventory, the assessor for the taxing unit, or an entity, if any, other than the collector,

that collects taxes on behalf of the taxing unit, shall provide the collector a true and correct copy

of the tax bill sent to the owner, including taxes levied against the dealer’s heavy equipment

inventory.”).

11

We have interpreted “property that does not exist in the form or at the location

described in the appraisal roll” as meaning a challenge that the property at issue “did not exist” at

“the location indicated on the appraisal roll.” See Kellair Aviation Co. v. Travis Cent. Appraisal

Dist., 99 S.W.3d 704, 707–08 (Tex. App.—Austin 2003, pet. denied) (citing with approval

Titanium Metals Corp. v. Dallas Cnty. Appraisal Dist., 3 S.W.3d 63, 66 (Tex. App.—Dallas 1999,

no pet.)); see also Titanium Metals, 3 S.W.3d at 66 (“[T]he ‘form’ of the property described in the

appraisal roll is ‘personal property.’ . . . Because we conclude that property did in fact exist in the

form (i.e., personal property) and at the location described in the appraisal roll, we conclude that

amending the roll under section 25.25(c)(3) was not authorized.”). Under that interpretation, a

property owner’s complaint seeking to allocate9 the taxable value of its personal property between

different taxing jurisdictions—a remedy that the Code otherwise allows for—still was not an

appropriate Section 25.25(c)(3) “form or location” challenge. See Kellair Aviation, 99 S.W.3d

at 707–08 (“Kellair cannot use section 21.03 to prove that the plane was not located within the

district for purposes of correction under section 25.25(c)(3), which requires that the property not

exist at the location indicated on the appraisal roll.” (emphasis added)). The subject property still

existed in the subject county.

9

Taxation based on “allocation” is, roughly speaking, the process of divvying up between

tax jurisdictions the value of a piece of property taxable in each relevant jurisdiction but in

proportion to the ratio of the property’s use within the respective jurisdiction to its use within all

jurisdictions. See Harris Cnty. Appraisal Dist. v. PXP Aircraft, LLC, 569 S.W.3d 256, 265 (Tex.

App.—Houston [1st Dist.] 2018, no pet.); Kellair Aviation Co. v. Travis Cent. Appraisal Dist.,

99 S.W.3d 704, 706–08 (Tex. App.—Austin 2003, pet. denied). For example, if an owner used a

piece of property 60% of the time in Dallam County and 40% of the time in Cameron County, then

taxation based on allocation would allow Dallam County authorities to tax only up to 60% of the

property’s value and Cameron County authorities only up to 40%.

12

This interpretation of Section 25.25(c)(3), binding on us, forecloses J-W Power’s

“form or location” ground. J-W Power is not arguing that the compressors “did not exist” in Irion

County; it is arguing only that Irion County authorities had no right to appraise the compressors

even though they were there. But the compressors on the Irion County appraisal rolls existed in

Irion County. Thus, J-W Power’s argument is like the property owner’s in Kellair Aviation—the

owner there said, and J-W Power here says, that some portion of the subject property did not

“exist” in the subject county because that county’s authorities had no right to tax that proportionate

value, whether by allocation in Kellair Aviation or by special DHEI computation here. But because

the subject property did in fact exist in the subject county, Section 25.25(c)(3) is not an appropriate

remedy.10 See J-W Power Co. v. Duval Cnty. Appraisal Dist., No. 04-21-00172-CV, 2022 WL

789345, at *7 (Tex. App.—San Antonio Mar. 16, 2022, no pet.) (mem. op.) (“J-W Power’s

argument is an end run around the rule that 25.25(c)(3) cannot be used to challenge the extent to

which a certain type of property, physically located in an appraisal district, is taxable in that

appraisal district.”).

We thus conclude that ICAD is entitled to judgment as a matter of law on J-W

Power’s Section 25.25(c)(3) ground. We therefore overrule the relevant portions of J-W Power’s

appellate issues and need not reach the others that focus on the other grounds on which the trial

court might have granted summary judgment. See Tex. R. App. P. 47.1.

10

We added in Kellair Aviation that the “form” of property at issue there was “a Raytheon

Hawker HS 125 800” airplane, which is not a description of the property signifying whether it was

subject to the usual market-valuation appraisal rules or to any special appraisal provisions. See

99 S.W.3d at 708. On this understanding of “form,” there is no argument here that the Irion County

appraisal rolls misnamed the brand name or type of the compressors at issue.

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CONCLUSION

We affirm the trial court’s summary judgment.

__________________________________________

Chari L. Kelly, Justice

Before Chief Justice Byrne, Justices Kelly and Smith

Affirmed on Remand

Filed: December 5, 2024

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