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In re Corpus Christi Liquefaction, LLC

Supreme Court of Texas

October 25, 2019

In re Corpus Christi Liquefaction, LLC, Relator

          On Petition for Writ of Mandamus

          PER CURIAM

         The boundary between Nueces County and San Patricio County runs along the northern shoreline of Corpus Christi Bay. In re Occidental Chem. Corp., 561 S.W.3d 146, 152 (Tex. 2018) (orig. proceeding). The submerged area is in Nueces County. For several years, both counties have taxed structures that are built on land in San Patricio County and extend out over the water into Nueces County. "Taxpayers have paid millions of dollars in taxes on the same property to each county. Barred by immunity from suing the counties, taxpayers' only remedy has been to file tax protest suits year after year against each county to preserve their right to a refund whenever it is determined which county lack[s] the authority to assess the taxes." Id. at 150. In 2017, the Legislature enacted Section 72.010 of the Local Government Code, which allows taxpayers in that situation to sue in this Court for relief.[1]

         The very next year, Occidental Chemical Corp. ("Oxy") did so. In In re Occidental Chemical Corp., we held that "[t]he common law . . . supports treating docks, piers, and similar permanent facilities that are connected to the mainland of San Patricio County as a part of that county" and that the "taxes owed by Oxy on its Piers [were] due San Patricio County, not Nueces County." 561 S.W.3d at 165. We "direct[ed] the Nueces County Appraisal District to withdraw and cease from issuing tax assessments to Oxy for its Piers and other facilities which we [had] held to be part of San Patricio County." Id.

         We noted that "[o]ther taxpayers [were] in the same predicament" as Oxy and pointed to an amicus brief filed by Corpus Christi Liquefaction, LLC ("CCL"). Id. at 153 & n.28; see also id. at 159 & n.70. On August 5, 2019, CCL petitioned the Court for the same relief we granted Oxy. CCL named Nueces County and the Nueces County Appraisal District (collectively, "the Nueces Parties") as the real parties in interest.[2] We requested and received a response from the Nueces Parties, to which CCL has replied. The record consists of a few attachments to the filings.[3]

         The material facts are undisputed. In 2015, CCL began construction of a massive natural gas liquefaction and export facility on the northern shore of Corpus Christi Bay. The first phase of the project has been completed; a second phase remains under construction. The facility is built on land in San Patricio County, with docks stretching out into the La Quinta Channel of the Bay, which is in Nueces County. The economic and employment consequences of the project will have a significant impact on the counties' tax bases.

         Taxes on CCL's facility are assessed by taxing units in both Nueces County and San Patricio County based on valuations by their respective appraisal districts. Before 2017, CCL paid the small amount of double taxes without protest. In 2017, the Nueces County Appraisal District's valuation increased to $4, 475, 000, and in 2018, to $81, 574, 640. CCL filed suits protesting taxes in both counties for those years, and those suits remain pending. CCL has never paid taxes to Nueces County because of a tax-abatement agreement permitted by statute, Tex. Tax Code §§ 312.001-.403, but that agreement is for only a temporary abatement in payment, not an elimination of the tax assessments. CCL has paid taxes to other taxing units in Nueces County.

         CCL asserts in its petition that it is being taxed in both Nueces County and San Patricio County on the same property, just as Oxy was. But since the petition was filed, the situation has changed somewhat. The Nueces Parties now tell us in their response:

Current Appraisal District records . . . reflect that CCL is being assessed zero dollars in ad valorem taxes on its La Quinta Channel facility by any taxing unit in Nueces County for 2018 and 2019. . . . Additionally, under a Tax Abatement Agreement between Nueces County and CCL, it does not yet owe-and has not paid-taxes to Nueces County on the facility.

Resp. to Pet. for Writ of Mandamus at 7. The Nueces Parties note that CCL has claimed that it paid taxes to the Corpus Christi Independent School District, a taxing unit in Nueces County. "Nonetheless," they add, "it is the Appraisal District's understanding that taxing units in Nueces County are currently refraining from taxing the facility and some units will be issuing refunds to the extent taxes were paid in tax years 2018 and 2019." Id. at 7 n.3. The Nueces Parties say nothing about CCL's 2017 taxes, and though the Appraisal District's records show CCL's facility valued at $0 for 2018 and 2019, they also still show a $4, 475, 000 value for 2017.

         In reply, CCL acknowledges that "[t]he Appraisal District zeroed out the value [of CCL's facility] on the appraisal rolls as late as ten days after CCL brought this action. . . . It is undisputed, therefore, that the appraisal rolls currently list CCL's facility at zero dollars." Reply in Supp. of Pet. for Writ of Mandamus at 1-2. But CCL insists, and the Nueces Parties have not denied, that the Appraisal District's actions do not forestall its return to the higher values. CCL has neither confirmed nor denied payment of taxes to taxing units other than Nueces County nor whether it has or will receive any refunds. CCL argues that the Appraisal District's changes in its tax rolls should not suggest that Nueces County no longer claims authority to tax CCL's facility because the tax-abatement agreement confirms that it does. The Nueces Parties respond that in the agreement, CCL has acknowledged Nueces County's taxing authority over its facility.

         CCL contends that its situation is identical to Oxy's and that the Nueces Parties are simply refusing to follow our decision in Occidental. The Nueces Parties argue that CCL's massive plant and docks are so different from Oxy's piers that Occidental's rationale and ruling do not apply. The Nueces Parties also assert-though restrictions on the number and length of filings at this stage do not permit them to argue-that to apply Occidental to CCL's facility would violate the federal and state constitutional rights of Nueces County and its residents.

         But we must first determine whether we have jurisdiction over this original proceeding. The Nueces Parties argue that by zeroing out the 2018 and 2019 appraisal values for CCL's facility, the Appraisal District has mooted the case. At least, the Nueces Parties argue, the case is not ripe for adjudication because "CCL has not paid taxes to Nueces County for the facility and the facility is still under construction." Resp. to Pet. for Writ of Mandamus at 7. We do not reach these arguments. As we explained in Occidental, the Legislature's grant of jurisdiction in Section 72.010 cannot exceed what the Texas Constitution allows. 561 S.W.3d at 154. Article V, Section 3(a) of the Texas Constitution states that "[t]he Legislature may confer original jurisdiction on the Supreme Court to issue writs of quo warranto and mandamus in such cases as may be specified, except as against the Governor of the State." Tex. Const. art. V, § 3(a). Besides the two express limits on the Legislature's power-that jurisdiction can only be to issue writs of quo warranto and mandamus, and not against the Governor-we recognized long ago in Love v. Wilcox three other limits inherent in the nature of these writs:

One is that the right to the duty required to be performed by mandamus shall not be dependent upon the determination of any doubtful question of fact. Another limitation is that the writ of quo warranto or mandamus be a proper or necessary process for enforcement of the right asserted. A third is there must be some strong and special reason for the exercise of this extraordinary original jurisdiction by a court designed primarily as the ...

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