HARRIS COUNTY APPRAISAL DISTRICT, Appellant, v. TEXAS GAS TRANSMISSION CORPORATION, Appellee.
No. 01-01-01103-CV.
Court of Appeals of Texas, Houston (1st Dist.).
March 27, 2003.
Appellant argues in Sub-issue No. 1f that appellees’ summary judgment grounds of release and ratification do not defeat his claims of civil conspiracy and fraud which he has asserted against appellees. He contends that appellees are liable for Jackie Jay‘s fraud because they paid her money after having knowledge of her allegedly fraudulent conduct. Appellant further alleges that appellees’ representations as to the amount of insurance benefits available to satisfy his claims became false when appellees paid additional amounts to Jackie Jay. Appellant‘s civil conspiracy and fraud claims are also dependent upon his allegation that Jackie Jay was a party to the releases he executed.
Finally, appellant argues in Sub-issue No. 1g that the releases do not release appellee State Farm Fire & Casualty Company from liability. The releases do not specifically identify State Farm Fire & Casualty Company. However, the releases state that appellant released appellee State Farm Mutual Automobile Insurance Company and each of its:
[P]artnerships, corporations, or professional associations with which [it has] been affiliated ... as well as any and all persons, firms, organizations, subsidiaries, affiliates, partners, predecessors and successors in interest, assigns, or corporations in privity with [it].
The record establishes that State Farm Fire & Casualty Company is affiliated with State Farm Mutual Automobile Insurance Company. We note in this regard that appellant has collectively referred to these two companies as “State Farm” throughout his pleadings and briefs. Appellant‘s sole appellate issue and each of its subparts are overruled.
The judgment of the trial court is affirmed.
David J. Kaplan, Geary, Porter & Donovan, P.C., Addison, for appellee.
Panel consists of Justices HEDGES, TAFT, and JENNINGS.
EN BANC OPINION
TIM TAFT, Justice.
Appellant, Harris County Appraisal District (the District), challenges a judgment rendered in favor of appellee, Texas Gas Transmission Corporation (Texas Gas), ordering the District to correct the 1995 appraisal roll to take into account interstate allocation for an aircraft belonging to Texas Gas. We address (1) whether a taxpayer must provide the District with information establishing entitlement to allocation at the time of rendition and (2) whether a prior year‘s appraisal roll may be corrected under
Facts
The facts are undisputed. Texas Gas was a wholly owned subsidiary of the Williams Companies, Inc. Texas Gas owned a business aircraft that was registered at Houston Intercontinental Airport and was taxable in Texas. The aircraft traveled outside of Texas, but returned for repair, storage, inspection, maintenance, and service.
On December 30, 1999, Texas Gas filed a motion under
On June 20, 2000, the District‘s appraisal review board heard the motion, which the board denied by written order on June 23, 2000. Texas Gas sued for judicial review of the order, and the parties submitted the case to the trial court on an agreed statement of facts. The trial court found that, in 1994, 39% of the aircraft‘s departures were from Texas. The trial court found in favor of Texas Gas and ordered the District to reduce the 1995 appraised value of the aircraft from $5,170,000 to $2,253,160.
Standard of Review
The case was tried pursuant to
Interstate Allocation
In its first issue, the District contends that Texas Gas had to show entitlement to interstate allocation for the aircraft at the time of rendition, but failed to do so. In its second issue, the District contends that, absent such a timely showing, Texas Gas
A. Showing Entitlement to Allocation at Time of Rendition
The Tax Code requires taxpayers to render for taxation all tangible personal property used for producing income on January 1 of the tax year. See
If personal property that is taxable by a taxing unit is used continually outside this state, whether regularly or irregularly, the appraisal office shall allocate to this state the portion of the total market value of the property that fairly reflects its use in this state.
(a) If an aircraft is used for a business purpose of the owner, is taxable by a taxing unit, and is used continually outside this state, whether regularly or irregularly, the appraisal office shall allocate to this state the portion of the fair market value of the aircraft that fairly reflects its use in this state. The appraisal office shall not allocate to this state the portion of the total market value of the aircraft that fairly reflects its use beyond the boundaries of this state.
(b) The allocable portion of the total fair market value of an aircraft described by Subsection (a) is presumed to be the fair market value of the aircraft multiplied by a fraction, the numerator of which is
the number of departures by the aircraft from a location in this state during the year preceding the tax year and the denominator of which is the total number of departures by the aircraft from all locations during the year preceding the tax year.
It is the chief appraiser who determines taxable personal property‘s market value. See
What section 21.055 implies, the comptroller‘s regulations and the Code sections concerning them expressly state. The Code directs the comptroller to adopt rules identifying the kinds of property subject to interstate allocation and to establish formulas for calculating allocation ratios. See
We thus hold that a taxpayer who seeks allocation must provide information showing entitlement to allocation at the time of rendition.
We sustain the District‘s first issue.
B. Correcting Appraisal Roll under Section 25.25(c)(3)
We have previously held that a property owner‘s failure timely to render property for taxation does not prevent a taxpayer from filing a correction of the appraisal roll to reflect an interstate allocation within the five-year deadline set forth in section 25.25(c)(3). See Himont U.S.A. Inc. v. Harris County Appraisal Dist., 904 S.W.2d 740, 744 (Tex. App.—Houston [1st Dist.] 1995, no writ). Several of our sister courts, in contrast, have held that section 25.25(c)(3) does not allow a taxpayer to correct the appraisal roll for this purpose. See Harris County Appraisal Dist. v. Tex. E. Transmission Corp., 99 S.W.3d 849, 851, (Tex. App.—Houston [14th Dist.] 2003, no pet. h.); A & S Air Serv., Inc. v. Denton Cent. Appraisal Dist., 99 S.W.3d 340, 342-44 (Tex. App.—Fort Worth 2003, no pet. h.); Kellair Aviation Co. v. Travis Cent. Appraisal Review Bd., 99 S.W.3d 704, 706-08 (Tex. App.—Austin 2003, no pet. h.); Corsicana Co. v. Dallas Cent. Appraisal Dist., No. 05-01-00759-CV, 2002 WL 244326 (Tex. App.—Dallas Feb. 21, 2002, no pet.) (not designated for publication) (citing Titanium Metals Corp. v. Dallas County Appraisal Dist., 3 S.W.3d 63, 66 (Tex. App.—Dallas 1999, no pet.)); Curtis C. Gunn, Inc. v. Bexar County Appraisal Dist., 71 S.W.3d 425, 429 (Tex. App.—San Antonio 2002, pet. denied); Aramco, 33 S.W.3d at 365.
Section 25.25 provides in pertinent part:
(c) The appraisal review board, on motion of the chief appraiser or of a property owner, may direct by written order, changes in the appraisal roll for any of the five preceding years to correct:
(1) clerical errors that affect a property owner‘s liability for a tax imposed in that tax year;
(2) multiple appraisals of a property in that tax year; or
(3) the inclusion of property that does not exist in the form or at the location described in the appraisal roll.
In Himont, we addressed whether a taxpayer is entitled under section 25.25(c)(3) to correct the appraisal roll to reflect an interstate allocation. See Himont, 904 S.W.2d at 742. Himont operated railcars continually in interstate commerce, but did not file a rendition. The appraisal district included the total value of the railcars without allocating the portion of their value that fairly reflected their use in Texas. Id. at 741. The appraisal district sent Himont a notice of value, but Himont did not follow any of the protest procedures under
In Himont, we were faced with an issue of first impression in Texas. Id. at 742. We began our analysis by attempting to define the term “form ... described in the appraisal roll.” Id. We recognized that the Dallas court of appeals had held that “form” referred to boundaries, shape, and configuration. Id. at 742-43 (citing Collin County Appraisal Dist. v. Northeast Dallas Assoc., 855 S.W.2d 843, 849 (Tex. App.—Dallas 1993, no writ)). We noted that neither the Tax Code, nor the case law, had interpreted the phrase “location described in the appraisal roll.” Id. at 743.
We turned to the legislative history, specifically the bill analysis for section 25.25(c)(3):
At this time there is no clear authority for an appraisal review board to remove nonexistent property from the tax roll. Nonexistent property includes the property of businesses which have gone out of business prior to the beginning of the tax year and property improvements which were either demolished or moved before the beginning of the tax year.
Himont, 904 S.W.2d at 743 n. 4 (citing SENATE WAYS & MEANS COMM., BILL ANALYSIS, Tex. S.B., 71st Leg., R.S., 379 (1989)) (emphasis added).
We stated that the legislative history was inconclusive because the word “includes” “suggests that the Legislature did not intend the two examples as the only reasons for which section 25.25(c)(3) can be used to correct the appraisal roll.” Id.
In contrast, in Aramco Associated Co., Aramco appealed the denial of a tax refund for the tax years 1991 through 1995 based on an allocation formula for a commercial aircraft. Id., 33 S.W.3d at 363. Aramco filed a written protest for the tax years 1991 and 1992 under Tax Code section 41.44, but failed to appear at the hearing, and the protests were dismissed. Aramco, 33 S.W.3d at 364. Aramco also filed protests for the tax years 1994 and 1995, but entered into a written settlement agreement with the appraisal district. Id. Aramco did not file a protest for the tax year 1993. The Texarkana Court of Appeals considered whether section 25.25(c)(3) allowed Aramco to correct the appraisal roll for the tax year 1993. Id. at 365. The court turned to the statutory language “form” and “location” and noted that Himont had interpreted the term “location” in section 25.25(c)(3) to mean taxable situs, rather than physical location.8 Id. The Aramco court noted that personal property can have more than one situs and disagreed with Himont‘s conclusion that interpreting “location” as situs permitted courts to review the appraised value on the tax rolls for the purposes of allocation. Id. The Aramco court concluded that, because the aircraft did exist in the form described in the appraisal roll (1969 DC-8-72 aircraft), and because the location described in the appraisal roll was an appropriate taxable situs, section 25.25(c)(3) was not a proper remedy for Aramco. Id.
Similarly, in Curtis C. Gunn, Inc., Gunn rendered an aircraft for the tax years 1997, 1998, and 1999 at different values from those adopted in the district‘s appraisal roll. Id., 71 S.W.3d at 427-28. Gunn did not protest the values, but filed a motion for interstate allocation under section 25.25(c)(3) in late 1999. Gunn, 71 S.W.3d at 427. After hearings, the appraisal district denied the motions, and Gunn appealed to the trial court. Id. “The trial court concluded that it lacked jurisdiction to hear Gunn‘s claims because Gunn could not file a motion to correct under section 25.25(c)(3).” Id. The San Antonio Court of Appeals agreed with the reasoning in Aramco on the basis that the Legislature had provided two specific procedures under Tax Code sections 41.41 and 25.25(d), each with specific restrictions, to challenge appraised values on appraisal rolls. Id. at 429. The court noted that “[b]roadly construing ‘location’ in section 25.25(c)(3) to permit a challenge to the allocation of the appraised value would be contrary to the legislative scheme.” Id.
Four other courts of appeals have agreed with the interpretation of section 25.25(c)(3) adopted by the courts in Aram-
In view of the conflicting authorities, we revisit whether section 25.25(c)(3) permits a correction in the appraisal roll for interstate allocation. The primary rule of statutory interpretation is that we must ascertain and give effect to the intent of the Legislature. See Cont‘l Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 398 (Tex. 2000). In interpreting the statute, we must consider the plain language of the statute and may consider the legislative history and the consequences from alternative constructions. See Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 383 (Tex. 2000); see also
We begin with the plain language of the statute. The plain meaning of “property that does not exist at the location described in the appraisal roll” obviously refers to the actual, physical presence of property at the place described in the appraisal roll. Defining the term “location” as meaning actual, physical location restricts section 25.25(c)(3) to those cases in which property did not physically exist at the appraisal roll location at any time during the taxable year. Thus, if there is some existence at the location, section 25.25(c)(3) does not allow a change in the appraisal roll. To hold otherwise would not give effect to the words “does not exist” in section 25.25(c)(3).
We next turn to the legislative history for further clarification. The bill analysis regarding section 25.25(c)(3) is somewhat inconclusive. It indicates that section 25.25(c)(3) addresses non-existent property that includes property of businesses that have gone out of business and property improvements that were either demolished or moved. See SENATE WAYS & MEANS COMM., BILL ANALYSIS, Tex. S.B. 71st Leg., R.S., 379 (1989). In Himont, we noted that this list was non-exclusive. Id., 904 S.W.2d at 743 n. 4. It is non-exclusive as to examples of non-existent property; however, there is no ambiguity that the section addresses only non-existent property. The two examples stated in the legislative history fall under the rubric of non-existent property. In contrast, personal property that exists, but that moves in and out of the state during the tax year, does not.
We also recognize that the Legislature made changes to section 25.25 in 1997, after the Himont decision, but did not change sub-section (c)(3) or amend section 25.25 in any way that would have defeated Himont‘s holding. See Act of June 1, 1997, 75th Leg., R.S., ch. 1039, §§ 26, 41, 1997 Tex. Gen. Laws 3897, 3910, 3916-17. When the Legislature amends a statute in ways that do not affect the interpretation of that statute previously given by courts, we presume that the Legislature has consented to the courts’ statutory interpretation. See Volunteer Council v. Berry, 795 S.W.2d 230, 240 (Tex. App.—Dallas 1990, writ denied). However, the Aramco decision issued in October 2000, and, although the Legislature amended section 25.25 in May 2001, the Legislature did not change sub-section (c)(3) or amend section 25.25 in any way affecting Aramco‘s holding. See Act of May 29, 2001, 77th Leg., R.S., ch. 439, § 1, 1999 Tex. Gen. Laws 861, 861; Act of May 29, 2001, 77th Leg., R.S., ch. 1430, § 6, 1999 Tex. Gen. Laws 5109, 5111. Therefore, the post-Himont and Aramco amendments are not helpful in ascertaining the
We now turn to the potential consequences of interpreting section 25.25(c)(3) as we did in Himont. First, there are specific procedures in the Tax Code for correcting an error in the appraised value of property. See
Under well-established rules of statutory interpretation, we may not interpret one portion of a statute so as to render another portion of the statute meaningless. Maley v. 7111 Southwest Freeway, Inc., 843 S.W.2d 229, 231 (Tex. App.—Houston [14th Dist.] 1992, writ denied). Interpreting section 25.25(c)(3) to allow a change in the appraisal roll for interstate allocation in any of the preceding five years, without penalty, nullifies the specific requirements set forth in section 25.25(d) for changing incorrect appraisal values.
We are now faced with the conflict between our prior decision in Himont and the decisions of our sister courts of appeals. We are aware of the gravity of stare decisis and the importance of adhering to precedents to maintain efficiency, fairness, and legitimacy. We are also aware that parties rely on our prior decisions for stability and consistency. Our responsibility in a situation such as this, however, is to reconsider our initial decision, in which we addressed an issue of first impression, in light of subsequent precedents. We must also determine if our initial decision, even if wrong, might have become so well-established, with so many relying on it, that consistency alone requires its continuation. Here, nothing shows that Texas Gas relied upon our 1995 decision in Himont because Texas Gas, unlike Himont, filed a rendition in 1995. Although the Attorney General relied on Himont in one opinion,10 other courts have chosen not to follow Himont, so that the holding in Himont has not become so well-established as to be impervious to change.
Accordingly, we hold that the language “does not exist in the form or at the location described in the appraisal roll” in section 25.25(c)(3) refers to property that does not have any physical location in Texas throughout the entire taxable year. This interpretation allows the statutory scheme to provide a limited five-year exception for property that does not exist, while providing relief under section
We sustain the District‘s second issue.
Conclusion
We reverse the judgment of the trial court and render judgment that Texas Gas take nothing by way of its suit.
A majority of the Justices of the Court voted to consider the cause en banc.
The en banc Court consists of Chief Justice RADACK and Justices HEDGES, TAFT, NUCHIA, JENNINGS, KEYES, ALCALA, HANKS, and HIGLEY.
Justice KEYES, concurring.
EVELYN V. KEYES, Justice, concurring.
I concur in the Court‘s judgment and its reasoning. I write solely to observe that not only our plain-language analysis, but also section 21.02(a) of the Tax Code (“Tangible Personal Property Generally“), supports our conclusion that the term “location” in the phrase “does not exist in the form or location described in the appraisal roll” in section 25.25(c)(3) of the Tax Code means “actual, physical location.”
Section 21.02 of the Tax Code provides:
(a) [With certain inapplicable exceptions,] tangible personal property is taxable by a taxing unit if:
(1) it is located in the unit on January 1 for more than a temporary period;
(2) it normally is located in the unit, even though it is outside the unit on January 1, if it is outside the unit only temporarily;
(3) it normally is returned to the unit between uses elsewhere and is not located in any one place for more than a temporary period; or
(4) the owner resides (for property not used for business purposes) or maintains his principal place of business in this state (for property used for business purposes) in the unit and the property is taxable in this state but does not have a taxable situs pursuant to Subdivisions (1) through (3) of this section.
Section 21.02(a) harmonizes with and further supports our holding that the authority provided by section 25.25(c)(3) to correct appraisals of tangible personal property that is only intermittently in the state is “restrict[ed] to those cases in which property did not physically exist at the appraisal roll location at any time during the taxable year.” See majority op. at 97.
SLW AVIATION, INC., Appellant, v. HARRIS COUNTY APPRAISAL DISTRICT and Harris County Appraisal Review Board, Appellees.
No. 01-01-01151-CV.
Court of Appeals of Texas, Houston (1st Dist.).
March 27, 2003.
Notes
(a) If a commercial aircraft that is taxable by a taxing unit is used both in this state and outside this state, the appraisal office shall allocate to this state the portion of the fair market value of the aircraft that fairly reflects its use in this state. The appraisal office shall not allocate to this state the portion of the total market value of the aircraft that fairly reflects its use beyond the boundaries of this state.
(b) The allocable portion of the total fair market value of a commercial aircraft that is taxable in this state is presumed to be the fair market value of the aircraft multiplied by a fraction, the numerator of which is the product of 1.5 and the number of revenue departures by the aircraft from Texas during the year preceding the tax year, and the denominator of which is the greater of (1) 8,760, or (2) the numerator.
(c) During the time in which any commercial aircraft is removed from air transportation service for repair, storage, or inspection, such aircraft is presumed to be in interstate, international, or foreign commerce and not located in this state for longer than a temporary period for purposes of
Section 11.01 of this code .
(e) A property owner who is entitled to an allocation of property must file a rendition form that provides enough information necessary to prove that entitlement to allocation and permit the chief appraiser to apply an allocation formula appropriate to the subject property ....
The form must permit the property owner to state an opinion of the total market value of the property and the amount of value that should be allocated to each taxing unit in which the property has situs.