Opinion filed March 26 , 2 009



### In The 

# Eleven th Court of Appeals

____________ 

### No. 1 1- 07 -0 00 48 -CV

____ ____ __ MID LAN D C ENT RA L A PP RA ISAL DIST RIC T, Ap pellant/C ross-App ellee
V.
BP AMERICA PRODUCTI ON COMPANY ET AL,

Ap pellees/C ross-App ellants

On App eal from the 238th Distric t Court
Midland County, Texas
Tr ial Co ur t C aus e No . C V4 48 64 (c ons oli dat e d)

O P I N I O N
Th e iss ue in t

his c a se is w he the r a

n a d v a lor e m ta x may

be imp os e d o n c ru de oil loc a te d in Midla n d Co u n ty in a ta n k f a r m t h a t i s a n in te g r a l p a rt o f

a n in te r s tate , c o mm o n c a r r ie r p ip e line sy stem. I n its appraisal rolls for 2003 and 200 4 , M i d l and C entra l Appraisal District ( MCAD) included oil lo ca ted in the tank fa rm on J anuar

y 1 of the re spective y ear s. MCAD allocate d

ow ne rs hip of

the oi l t o v a

ri ou s sh ipp e rs , in c lud ingB P Am e ri c a Pr od uc tio n Co mpa

ny ; A me ra da

He ss TradingCompany ; Chevron USA, I nc.; Chevro n T e xa c o Pr o d u c ts Co mp a

ny ; ChevronTexaco Globa l2

Supply and Tra ding Company ; TEPPC O Crude Oil L L C; and TEPPC O Crude P/LL L C (here inafter

re fe rr e d to c oll e c tiv e ly

a s th e Oi l Co mpa

nie s) . T he Oi l Co mpa

nie s p ro pe rl y

pr ote ste d a

nd ult imate ly broug ht four sepa

rate suits in di strict court. Af ter consolidating the suits and conducting a nonjury tr ia l, t he tr ia l c ourt

re nd e re d ju dg me nt t

hat th e oil wa s n ot t a xab le bu t de nie d th e Oi l Co mpa nie s’

re qu e st f or a tto rn e y ’s fe e s. MCA D a pp e a ls t he tr ia l c ourt ’s ru lin g re g a rd ingthe ta xab ili ty of the oil , and the Oil Companies appe al the denia l of attorney ’s fe es. We aff irm. I

. Issues MCAD prese nts six issues for review. In the first issue, MCAD conte nds that the trial cour t

err ed as a matter of la

w in deter mining that the oil is not taxable in Midland County

. I n the sec ond i s s u e , M C A D c o n t e n d s t h a tt h e t r i a l c o u rte r r e d i n f i n d i n g t h a to i l h a d n o s i tu s i n M i d l a n d C o u n t y. I n th e thi rd

iss ue , M CA D c on te nd s that the tr ia l c ourt e rr e d in ho ldi ngthat th e oil wa s in int e rs ta te

co m m er ce
. I n i t s fo u rt h i s s u e, M C AD ch al l en ges t h e l ega l an d fa ct u al s u ff

i ci en cy o f s ev er al fi n d i n gs of fa ct and a sserts that the trial c ourt err ed in considering the oi l as i ndividual barr els rathe r than a n ag g reg ate inventor

y . MCAD argues in its fifth i ssue t hat t he trial court erre d in finding that the tax is n ot a pp lie d to a n a c tiv ity

or oil wi th a su bs tanti a l ne xus to Te xas. I n it s f ina l is su e , M CA D a sse rt s that th e tr ia l c o u rt e r

r e d in f in d in g th a t M CA D ’ s a ll o c a ti o n o f o w n e r s h ip o f th e o il was not

rea sonable. The Oil Companies pre sent two is s u es fo r re view. In their first issue, the Oil Companies contend that the tr ial court e rre d in denying the ir reque st for attorne y ’s fe es be ca u s e the awa rd of

a t t o r n e y’ s f e e s w a s m a n d a t e d

b y s t a tu t e , s p e c i f

i c a l l y T EX
. T AX C ODE ANN . § 42.29 (Ve rnon 2008). I n their sec ond issue, the Oil Companies as sert that MCAD wa ived its challeng e to the aw ard of attorney ’s fe es by

reque sting finding s of fa ct that support the aw ard.

I I

. Ba c k gr ou nd Fa c ts The re cord shows that the underlying f acts in this case are larg ely undisp uted. The

un c ha lle ng e d fin di ngs of fa c t in dic a te that oi l a t is su e in t his c a se wa s p ro du c e d mo stl y in We st Texas and a small amount in easter n New Me x ico and wa s injected into the Midland Pipeline Sy stem, a spiderw eb conf igur ation of interc onnecting pipelines cove ring m o re t h an two dozen counties in West Tex as and e as t er n Ne w M ex ico. The Midland Pipeline Sy stem is an interstate,

common car

rier pipe line sy stem that is regulated by the Feder al Energ y Reg ulatory

Commi ssion andW e note a ls o that a produc tion ta x is le v ie d on oi l t hat is produc ed in T ex as . T EX
. T A X C O D E A NN . § 202. 051 (Ve rnon 1 2008). 3 is operate d by

various pipeline companies that are not pa rties to these proc eeding s. Upon injection of the su bje c t oil int o a pip e lin e , c on tr ol a nd c us tod y wa s re lin qu ish e d to the pip e lin e com pan ie s; the oil , b e ingfu

ng ibl e , b e c a me pa

rt of the c omm on

str e a m of oil

. Oi l in the sy ste m tr a ve ls thr ou g h pipe lin e s in Texa s, takin g no mor e tha n tw o a nd on e -h a lf

wee ks, to final destinations at various oil ref ineries loca

ted in Texas and in other states. Duringthe journey , a lar g e amount of oil passe s thr o u gh the tank fa rm wher e the Midland Pipeline Sy stem

c on ve rg e s. Th e tank fa

rm fu nc tio ns a s a

n in te g ra l pa

rt of the Mid land

Pip e lin e Sy ste m and

e xists to f a c ili ta te the tr a ns po rt a tio n o f t he oil , n ot t o s tor e oil . T he oil in the tank fa rm a rr ive s a nd e xits via the Mid land

Pip e lin e Sy ste m. T he tim e fr om e ntry in to a tank to e xit f ro m a tank is s ix to seventy -two hours. How ever , a certain mi nimum volume of cushion oil is require d to be maintained in eac h tank for sa fety

rea sons and to meet emission standa rds, resulting in the constant pre sence of a lar g e amount of oil in the tank far m. Ble nding, batching , or stag ing of the oil may occur at the tank far m as nec essar

y to fac ilitate the transmission of the oil throug h the M idland Pipeline Sy stem, but these proc esses do not interr upt the continuity

of transit. The ta

nks are not used for stora g e. Oi l is bo ug ht, so ld, a nd

tr a de d b y do c ume nt t

ra ns fe rs ir re sp e c tiv e of wh e re the oil may be in the sy stem. These tra

nsfer s do not a lter the movement of the oil or interrupt its in-transit movement to refine ries. Upon a

rrival at a re finery , the oil is assessed and listed for taxation by

the local appra isal authorities. Fur thermore , ad valore m ta x es ar e asse ssed on the pipelines, tanks, phy sical 1 assets, and e quipment at the tank fa rm. I n 2003 and 2004, those ad valorem taxes wer e timely paid. I I I

. MCAD’s Appe al A. Su ffi c ie nc yof t he Cha lle ng e d F

ind ing s. MCA D c ha lle ng e s se ve ra l of the tr ia l c ourt ’s fi nd ing s re g a rd ing the te mpo ra ri ne ss of the oil in M idl a nd

County a nd in Te xas, the c on tin

uit y of the oil ’s tr a ns it, the ult imate de sti natio n o f t he oil , a nd the oil ’s status a s b e ingin i nte rs ta te c omm e rc e . M CA D a rgue s in its fo ur th i ssu e that th e re is

no e vid e nc e to su pp ort the c ha lle ng e d f ind ing s and

that th e e vid e nc e is f

a c tua lly ins uf fi c ie nt t o support those finding s. MCAD also argues in its four th issue that the trial court err ed in consider ing the oil as individual barre ls of oil rather tha n an oil inventory

.4

We reviewsufficie ncy

challeng es to a trial c ourt’s finding s of fa ct under the same standa

rds that we use to reviewa jury ’s finding s. Catal i n a v. Blasdel , 881 S.W .2d 295, 297 (Tex. 1994); An de rso n v . Ci ty

of S e v e n P oin ts , 806 S.W .2d 791, 794 (Tex. 1991). I n analy zing a leg al suffic iency challeng e, we must determine whe ther the evidenc e at trial would enable rea sonable a nd fair- minded people to re ach the verdic t under re view. City of Keller v. W ilson , 168 S.W .3d 802, 827 (Tex. 2005). We must review the e vidence in the light most favor able to the c hall en ged finding , cre diting any fa vo ra ble e vid e nc e if

a re a sonable fa c tf

ind e r c ou ld a

nd dis re g a rd inga ny

c on tr a ry e vid e nc e un le ss
a re asonable fac tfinder c ould not. Id. at 821-22, 827. We may sustain a no-e vidence or leg al sufficie ncy

challeng e only

when ( 1) the re cord discloses a complete absenc e of a vital fac t, (2) the court is bar

red by rules of la

w or evidence from g iving we ight to the only evidenc e off

ere d to prove a vit al fact, (3) the only

evidenc e off

ere d to prove a

vital fac t is no more than a mer e scintilla, or (4) the e v i d en ce conclusively establishes the opposite of a vital fac t. Id. a t 8 1 0 ( c it in g Ro b e rt W

. Calvert, “No Evidenc e” and “Insufficient Evidence ” Points of Error , 38 T EX
. L. R EV . 361, 362-63 (1960)) . I n analy

zing a f actua l sufficienc y

challeng e, we must consider and weig h all of the e vidence and dete rmine whe ther the e vi d en ce i n s u pport of a f inding is so wea

k as to be c lear ly

wrongand

un jus t or whe the r the fi nd ing is s o a g a ins t th e g re a t w e ig ht a nd pr e po nd e ra

nc e of the e vid e nc e a s to be cle arly wrongand manife stly u n j u st. Do w Ch e m. Co. v . F ra nc is , 4 6 S. W. 3 d

2 3 7 , 2 4 2 ( T e x. 20 01 ); Pool v. Ford Motor Co. , 7 15 S.W. 2d 62 9, 63 5 ( Te x. 19 86 ); In re Kin g’ s E sta te , 244 S.W .2d 660, 661 (Tex. 1951). We review a trial c ourt’s conc lusions of law, including those mislabeled as finding s of fa ct, de novo. See B MC Software Belgium, N.V. v. Marchand , 8 3 S. W. 3 d 7 8 9 , 7 9 4 ( T e x. 2002). At tr ia l, s e ve ra l w itn e sse s, inc lud inge mpl oy e e s o f t he pip e lin e c omp a nie s, e xpla ine d th a t a tank is ba sically a wide spot in a pipeline and that the tank far m is simply a g ather ing lo ca t i o n of multipl e pipelines that bringbarr els of oil in at var y ing r ates a

nd vary ing pr essure s and allows the oil to be gathere d to move on to the next desti nation. The Oil Companies are not allowed to store oil in the pipeline sy stem. The oil in the tank s i s i n constant movement: either filling or wi thd ra wi ng
. Af te r re vie wi ng a ll the e vid e nc e , w e ho ld t hat, a lth ou g h th e re is a

su bs tanti a l qu a nti ty of oil that is constantly prese nt in the tanks, the trial court’s finding s reg ardingthe continuity of the oil’s transit are supported by leg ally and fa ctually

sufficie nt evidence

.5

MCAD also cha lleng es finding s reg ardingthe ultim at e destination of the oil and the oil’s status as being in the stream of interstate commerce . The trial c ourt found that a va st majority of the oil located in the tank far

m is sent to ref

ineries located outs ide of Texas and that less than ten pe rce nt of the oil rema ins in Tex as. These finding s are supported by testimony showing that the oil passing throug h the tank fa

rm trave ls through the pipeline sy stem and ca n be off l o ad ed at only

three ref ineries in Te x as. Testimony showed that the am o u nt of oil offloade d at these thre e re finerie s amounts to less than ten perc ent of the oil that passes through the tank farm in the pipeline sy stem and that “the rest of t he oil has t o leave the s tate.” After revie wing all of the e vidence , we hold that the cha lleng ed finding s of fa ct ar e sup p o rt ed by leg ally and fa ctually

sufficie nt evidence . To the extent that MC AD’s f

ourth issue cha lleng es the suff iciency of the e vidence , it is overruled. B. W as the Oil Taxable in Midland County? Unless exempt by law, tangible personal property in Texas is tax able if it is located in Te x as fo r l on g e r t

ha n a te mpo rary perio d, is t e mpo ra ri ly loc a te d o uts ide Te xas b ut t he ow ne r r e sid e s in Texas, or is used continually in Texas. T EX
. T AX C ODE ANN . § 11 .0 1 (V e rn on 20 08 ); se e als o T EX
. T AX C ODE ANN
. § 21.02 (Ve rnon 2008) (taxable situs in taxi ng unit). I n deter mining whe ther the oil a t is su e in t

his c a se wa s ta xab le , w e a dd re ss w he the r t

he oil wa s i n th e st ream of int e rs ta te

commerc e, whe ther the tria l co u rt er re d i n failing to consider the oil as a constant pre sence in the ta n k s r a th e r th a n in d iv id

u a l b a r r e ls in tr a n s it , a n d w h e th e r th e o il h a d s it u s in M id la

n d Co u n ty

. We ultimately

conclude that the tax viol ated the Commerc e Clause of the United States Constitut ion, U.S. C O N ST
. ar t

. I , § 8, cl. 3, and that the ta x was not valid under Section 21.02(a) (1) due to the temporar y period duringwhich the oil was loc ated in Midland County

. 1. Interstate Commerc e. The fir st question is whether the oil had be en plac ed int o the s tream of interstate commerc e. M CA D a r g u e s th a t it h a d n o t. I n te r s tate c o mm e r c e “ o c c u r s w h e n g o o d s ‘ h a v e b e e n s h ip p e d , or enter ed with a co m mon car rier f or transpor

tation to another State, or ha ve bee n started upon suc h transportation in a continuous route or jour ney .’” Va . I

nd on . Co . v . H

arris Cou nty

Ap pr ais al D ist

. , 910 S.W .2d 905, 908 (Tex. 1995) ( VI CO ) ( ci t i n g Coe v. Errol , 116 U.S. 517, 527 (1886)). The trial court found and the uncontrove rted evidence indicates that, prior to m aking its way to the tank fa

rm, the subject oil was injec ted into a fe d era lly regulated, interstate common car rier6

pip e lin e sy ste m. On c e inj e c te d, the oil re ma ine d in the pip e lin e a nd un de r the pip e lin e ’s c on tr ol u nti l it reac hed its ultim ate de stination, a ref inery . The e vidence also shows that the tanks in the tank fa rm
are and were an integ ral part of t he int erstate pipeline sy stem and that, althoug h the destination of the oi l a c tua lly

in t he tank s a

t th e tim e of

the a sse ssm e nt c ou ld n ot b e de te rm ine d, ov e r n ine ty perc ent of the oil passing throug h the tank far m was transpor

ted to ref ineries out of state

. See E

ureka Pipe Line Co. v. Hallanan , 257 U.S. 265, 272 (1921) (stating that a tank in a n oil pipeline “may

be reg arde d as a pipe of larg er size”)

. The ne x t question is whether the oil re mained in transit in the s tream of interstate commerc e when it w a s a t th e ta

n k f a r m. M CA D a s s e rts th a t th e s u b je c t o il s h o u ld b e v ie wed a s a massive

c on sta nt p re se nc e of

oil in t he tank fa rm a nd that, if so vie we d, it c a nn ot be c on c lud e d that the oil

wa s in int e rs ta te c omm e rc e or

that it wa s o nly te mpo ra ri ly in M idl a nd

County . In s up po rt

of thi s contention, M CAD relies upon Di am on d S ha mr oc k Re fin ing an d M ar k e tin g Co . v . Nu e c es Co un ty Appraisal Distr ict , 876 S.W .2d 298 (Tex. 1994), and Exx on Corp. v. San Patricio County Appraisal District , 8 22 S.W. 2d

26 9 (T e x. Ap p. —Co rp us Chr ist i 19 91 , w ri t de nie d) . We fi nd the se c a se s to be fa ctually

distinguishable. I n Diamond Shamrock

, th e s u p r e me c o u rt h e ld th a t o il s to r e d in ta n k s w a s s u

b je c t to an ad valor em tax where the oil was imported from abroa d into Texas, which was its final destination. 876 S.W .2d 298. Upon ar riving i n T ex as , t he oil, which wa s owned by Diamond Shamrock a

nd destined for Diamond Shamrock’s ref inery in T exas, w as offloade d into a storag e fa cility

and stored in tanks befor e being transporte d to a re finery in another c ounty

by pipeline. Althoug h the par ties stipulated that the oil at issue was “in transit,” the court deter mined that the situs of

ea ch b arr el sh ou ld n ot be c on sid e re d be c a us e the inc ide nc e of

the ta x impo se d w a s th e y e a r- ro un d p re se nc e in the storag e fa cility

of a la rg e volume of oil bel o n gi n g to Diamond Shamrock. Id. at 300-04. The court in Diamond Shamrock sp e c if ic a lly lim ite d its ho ldi ng to f or e ig n g oo ds in t

ra ns it thr ou g h o nly one state that remain in that state. Id. at 302, n.7. Fur thermore , th e o i l at issue in Diamond Shamrock wa s lo c a te d in

a sto ra g e fa c ili ty , w he re a s th e oil a t is su e in t his c a se ha d be e n inj e c te d in to interstate c ommon carr ier pipelines a nd was located in tanks that were an integr al par t of the

common car

rier pipe line sy ste m wi thin the stream of inter state commer ce. E ven whe n viewed a s a consta nt presenc e, the oil at issue in this case, like the massive quantit y of oil constantly

prese nt7

within the pipelines themselves, was located in the stre am of interstate commer ce w here it had been commingle d with oil from numerous other shippers and was – for the most part – being transporte d to another state

. I n Exx on , as in the present case , oil that was locate d in working tanks was taxed. 822 S.W.2d 269. The court ruled that, althoug h eac h individual barr el remained i n the county for no long er tha

n
se ve nte e n d a y s, the oil a c qu ir e d sit us the re be c a

us e Exxon ma int a ine d a t a ll tim e s a ma ssi ve qu a nti ty of oil in the tanks. Id. at 272-74. As in Diamond Shamrock , h o w e v e r , th e o il in Exx on wa s not destined for an y l o ca t i o n outside the State of Te x as. The oil at issue in Exx on was tra nsported,

r e f in e d , a n d s o ld in T exas. Id. at 272. Nothing in the c ourt’s opinion in Exx on indicates that interstate c ommerce was involved. Subsequent to its opinion in Diamond Shamrock , the Texas Supreme Court consider ed and struck down a

n ad valor em tax assessed on g ood s that had bee n place d into the export st rea m of

commerc e but wer e tempora rily locate d in a fa cility

belong ing to a

n independe nt export packer. VI CO , 910 S.W .2d at 906-08. Althoug h the cour t in VI CO relied upon the I mport-Export C lause, U. S. C O N ST . art. I , § 10, rathe r than the Commerc e Clause to invalidate the tax, t he court re cog nized that th e do c tr ine us e d to de te rm ine wh e the r g oo ds a re in tr a ns it a t the tim e of ta xati on a pp lie s e qu a lly under e ither cla

use. Id. at 908 & n.1. The c ourt rec og nized the y ear -round pr esenc e in the pac ker’ s fa c ili ty of g oo ds be lon g ing to VI CO bu t did no t re ly on the g oo ds ’ c on sta nt pr e se nc e a s a fa c tor

in its determination that the g oods remaine d in transit and in the stream of export. Id. at 907-14. I n VI CO , t h e g oods had bee n committed to foreig n export and were transporte d to the packe r’s facility to be checke d, approve d for import into I ndonesia, inspected, packag ed, and c lear ed for shipping. Id. at 9 0 7 , 9 1 3 -14. The court held that the te mporary stoppag e of the g oods at the packe r’s fa cility , which usually took no m o re t h an fo rt y -five da y s, did not break the c ontinuity of transit and that the g oods remai n ed i n t h e strea m of export. Id. at 907, 912-14. In deter mining whether the stoppag e disrupted the continuity of transit, the c ourt in VI CO followed Supreme Court prec edent a

nd rea soned that it “is the pu rp os e of t he st oppag e that is important.” Id. at 912 (c iting Cha mp lai n R e alt

yCo. v . To wn o

f B ra ttl e bo ro , 26 0 U. S

. 366, 376-77 (1922) , and Minnesota v. Blasius , 290 U.S. 1, 11-12 (1933))

. When the stoppag e is attributable to a business purpose of the

owner , the in-transit status is deemed to have terminated, and the g oods are subject to taxation i n theBl endi ng is the m ix ing of oil of low s ulf ur c onte nt (sw ee t cr

ude) w ith oil of

hig her s ulf ur c onte nt ( sour

c rude ). Ba

tc hing 2 k e e p s o i l o f d i f

f e r e n t g r a d e s s e p a r a t e
. S t a g i n g i s t h e a c c u m u l a t i o n o f s u f

f i c i e n t v o l u m e s o f o i l n e c e s s a ry f o r t r a n s m i ss ion i n the p i p el i n e s yst em. 8 jurisdiction wher e they

are stopped. Id. I n contra st, if the stoppag e is a nece ssity of the journe y

or for the purpose of safe ty and convenie nce in the course of the journey , the s t o p p age d o es n ot interrupt the c ontinuity

of transit. Id. I n the pre sent ca se, the “ stoppag e” w as not r elated to a business purpose of the owne r. The

e vid e nc e a nd

the tr ia l c ourt ’s fi nd ing s in dic a te that, ba rr inga ny ma lf un c tio n, oil is d e lay e d f

or six to s e ve nty -t

wo ho ur s in the tank fa

rm fo r pur

po se s re la te d to the op e ra tio n o f t he pip e lin e sy ste m. Eac h tank i s require d to maintain 8,000 to 10,000 barr els of oi l as a cushion for safety and emission

rea sons. Oil may also be dela y ed for blending , batching , or stag ing – ope rational func tions of the pipeline sy stem that are nece ssary to fac ilitate the transmission of the oil. Thus, as in VI CO , the 2 “stoppag e” of

the oil did not int err

upt the continuity

of transit. We h old that th e tr ia l c ourt

c or re c tly de te rm ine d th a t the oil wa s in the str e a m of

int e rs ta te

commerc e. The oil had been injec ted into a common carrier pipeline sy stem and re mained in that int e rs ta te sy ste m a t th e tim e of the ta x ass e ssm e nt. Any

de lay a t th e tank fa

rm wa s n ot attr ibuta

ble to the Oil Companies but, rather, w as incidenta l to the transportation of the oil by the common

car rier a nd was ne cessa

ry for the sa fe a

nd eff icient oper ation of the pipeline sy stem. 2. Validity of T

ax Unde r CommerceClause. Next, we must determine whe ther the ta x on the o i l i n interstate tra nsit viol ated the Com mer ce Cl aus e . T he Com me rc e Cla us e g ra nts Con g re ss t

he po we r t o r e g ulate int e rs ta te

commerc e and impli citly prohibits cer tain state re g ulation of interstate c ommercia l activity

. Okla. Tax Comm’n v. J

efferson Lines, Inc. , 5 14 U. S. 1 75 (1 99 5) . H ow e ve r, no t all state ta xes on i nte rs ta te

commerc e are prohibited. Complete Auto Transit, Inc. v. Brady , 4 30 U. S. 2 74 (1 97 7) . Purs ua nt t o Com ple te Au to , a st ate tax does not violate t he C ommerce Clause i f i t meets a f our-pr ong ed test set out by the Court. To be va lid, the tax must (1) apply to an ac tivity

with a substantial nexus wit h the taxi ng state, (2) be fa irly

apportioned, ( 3) not discriminate a g ainst interstate c ommerce , and (4) be fairly related to the servic es provided by the state. Id. a t 27 9, 28 7; Vi nm ar , In c
. v
. Har ri s C ou nty Ap pr ais al D ist

. , 947 S.W. 2d 55 4, 55 5 (T e x. 19 97 ). To e sta bli shthat a

state ta x is un c on sti tut ion a l,9

the taxpay er ne ed only

prove that t he tax fails one prongof the Com ple te Au to test. Vinmar , 947 S.W .2d at 555. The trial court conclude d that the tax violated the Commerce Clause and that the tax did not satisfy the “substantial nexus” requir ement of the C o m p l e t e Au to t es t. The substantial nexus require ment of Com

ple te Au to is a means for limiting state bur dens on interstate commerc e. Qu ill Cor p. v . No rth Da k

ota , 504 U.S. 298, 313 (1992). I n support of t heir contention reg ardingsubstantial nexus , the Oil Companies cite to a r ece nt opinion of the Texarkana C o u rt o f A ppeals, Peoples Gas, Light, & Coke Co. v. Harrison Central Appraisal Distr ict , 270 S.W .3d 208 (Tex. App.—Texarkana 2008, pets. filed). In Peoples , the cour t struck down a

n ad valor em tax assessed ag ainst the owner of natura l ga s on g as that had be en plac ed into the stream of inter state commerc e and was located in a n underg round storag e fa cility owned by

a n in te rs ta te pi pel ine c omp a ny . T he c ourt

de te rm ine d th a t th e ta x viol a te d th e Com me rc e Cla us e be c a us e the g a s o wn e r’ s ac tiv iti e s in Texa s and its c on ne c tio n to T e xas w e re too te nu ou s to c re a te a substantial nexus. 270 S .W.3d at 218. I n contra st, MCAD asser

ts that we should not follow Peoples but should inst ead f ollow the decision reache d by the S upreme Court of Oklahoma in In re Assessment of P ersonal Property Taxe s Against Missouri Gas Energy, a Division of Southern Union Co. , No. 103,355, 2008 WL 4648330 ( O k la

. O c t. 2 1 , 2 0 0 8 )

. I n Missouri Gas , the cour t upheld an ad va lorem tax on ga s held in an und er gro u n d

s t o ra ge f ac i l i t y o wn edan d

o p er at edb y

an i n t er s t at e, co m m o n ca rr i er pipeline. Missouri Gas Ene rg y

owned the g as, which w as ultimately transporte d o u t of state. The Oklahoma c ourt deter mined that the g as wa s not mere l y p as s i n g throug h the county to an out-of- state destination beca use the lar g e volum es of g as t hat were stored in the facility for a substantial part of the y ear wer e

“ n o t i n tr a n s it

in s u c h a w a y a s to in v o k e th e p r o te c ti o n of t he Co mm e r c e Cl a u s e
. ” 2 0 0 8 WL 4648330, at *11. We find at least one c rucia l fac t of Missouri Gas to be distinguishable from the f acts of the prese nt ca s e. T h e cr ude oil in the prese nt case was not in storag e but, rather, wa s in transit in the str e a m of int e rs ta te c omm e rc e . F or thi s sa me re a so n, the c a se a t ha

nd pr e se nts a n e ve n s tr on g e r c a se for a Commerce Clause violation than did the circumstanc es in Peoples

.We not e that MCA D as serts in its bri ef that the oil is als o taxable pursuan t to Section 21. 02 (a)(4), w hich allow s personal 3 prope rty to be ta x ed if

“ the ow ner re si des (f or pr oper ty not use d f

or bus ine ss purpos es ) or

m ai nta ins the ow

ner ’s pri nci pal pla ce of b u si n ess in th is sta te ( forpr o p ert y us ed for b u si n ess pu rp o ses ) i n th e u n it an d th e p ro p ert y is t axab le in th is sta te bu t d o es n o t h ave a ta x abl e si tus purs uant to Subdiv is ions (1) throug h (3) of this subs ec tion. ” How ev er , the tri al cour t m ade no f

inding s of f ac t on this issue, and MCAD did no t request that the trial court m ake a f ind ing reg ardin g the princip al place of business. Moreo ver, the e vidence does not indic at e tha t Mi dla nd Count y is the pri nci pal pla ce of

bus ine ss in this s ta te f

or a ny of the O il Com

pani es
. 10 To comply with the first prong of the Com ple te Au to test, the ad valore m ta x on the oil in the tank fa rm mus t have a

pp lie d to a n a c tiv ity

wi th a su bs ta nti a l ne xus w ithTe xas. Al tho ug h th e oil its e lf ha d a su bs tanti a l ne xus w iththi s st a te a s muc h of it wa s pr od uc e d in t his state a nd

so me of it

wa s d e sti ne d f

or a n in -s ta te re fi ne ry , th e “ a c tiv ity” be ingtax ed had no su c h n e xus. Th e a c tiv ity essentially

being taxed in thi s case was the ow nership of oil that wa s prese nt but i n t ransit on J anuar y 1 in a tank fa

rm that constituted an integ ral pa rt of an inter state, comm o n car rier pipe line sy ste m. Fur

thermore , i f t h e t ax in t his case is uphe ld, then ad valor em taxes could potentially be levied by any taxi ng authority on oil in transit but located, at the time of assessment, in the portion of an inter state pi peline sy stem within the boundaries of that taxing authority . The re sult would be an impermissible multipl e burde n on interstate c ommerce
. See Michigan-W isconsin Pipe Line Co. v . Ca lv e rt , 347 U.S. 157, 170 (1954) (holding that tax on taking of g as into interstate pipeline infring ed upon the Com merc e Clause a nd rec og nizi ng that such tax would permit a multipl e burde n up on c omm e rc e be c a

us e oth e r s ta te s c ou ld i mpo se a ta x on th e fi rs t takin g of the same g a s in the ir state). We hold that the tax in the p re s en t ca s e d oes not satisfy the Com ple te Au to te st a

nd that it runs af oul of the Commerce Clause. 3. Va lid ity of T ax Pu rsu an t to Sta te Law. Section 21.02 provides in re levant par t that tang ible proper

ty in Texas is taxable by

a taxing unit if “it is located in the unit on J anuar y 1 for more than a tempor ary period.” Section 21.02(a) (1). 3 The trial c ourt conc luded that t he oil was not located in Midland County for longer than a temporary period. We ag ree
. As discussed above , the re cord shows that the oil had b een injected into an interstate , common car

rier pipe line sy stem; that the oi l mere ly trave led throug h Midland County in the pipeline sy ste m; that a ny de lay of

the oil in t

he tank fa rm wa s te mpo ra

ry a nd wa s n e c e ssa

ry on ly to f a c ili ta te the continued tra

nsportation of the oil; and that the tank f arm wa s not used for stora g e. Although11

muc h o f t he oil ha d a

ne xus w ithTe xas i n th a t it wa s p ro du c e d in Te xas, it h a d n o s uc h n e xus w ith Mid land County

. Th e oil wa s me re ly tr a ns po rt e d thr ou g h Mid land County a nd wa s on ly te mpo ra ri ly located in the c ounty . Thus, we hold that the tria l c ourt did not err in c oncluding that the oil ha d no taxable situs i n Midland County

. T h e t a x w a s n o tv a l i d

un d e r t h e C o m m e r c e C l a u s e o r S e c t i o n 2 1

. 0 2 ( a ) ( 1 )

. C o n s e qu e n t l y, MCAD’s first, sec o n d , t h i rd , fourth, and f ifth issues are overr

uled. We need not r eac h MCAD’s six th issue conce rning allocation of ow nership. T EX
. R. A PP
. P. 47.1. I V. Oil Companies’ Appeal Th e Oi l Co mpa

nie s a pp e a l th e tr ia l c ourt ’s re fu sa l to a wa rd the m a tto rn e y ’s fe e s. I n T e xas, attorney ’s fe es are recove rable from an opposing party only when a uthorized by

statute or by

contra ct betwee n the par

ties. Tra v e le rs I

nd e m. Co. of Con n. v . M

ay fie ld , 923 S.W .2d 590, 593 (Tex. 1996). The Oil Comp an i es as s ert that attorney ’s fe es we re a uthorized by

Section 42.29 of the Ta x Code. Th e tr ia l c ourt e nte re d fi nd ing s of fa c t a s to the a mou nt o f atto rn e y ’s fe e s th a t w ou ld b e re a so na ble if rec overa

ble under Section 42.29. The trial court concluded, however, that the Oil Companies were not entitled to attorney ’s fe es under Section 42.29. Section 42.29 provides that a “prope rty owner who pre vails in an appe al to the cour t under Section 42.25 or 42.26 may be awa rded rea sonable attorney ’s fee s.” T EX
. T AX C ODE ANN . § 42.25 (Ve rnon 2008) pr ovides a re medy for a n excessive appr aisal, entitling the owner to a reduc tion of the appr aised va lue on the appr aisal roll. T EX
. T AX C ODE ANN . § 42 .2 6 ( Ve rn on 20 08 ) p ro vid e s a
re me dy fo r t he un e qu a l a

pp ra isa l of

pr op e rt y in re la tio n to the a

pp ra ise d va lue s o f o the r p ro pe rt ie s. Sections 42.25 and 42.26 do not apply to this case beca use the Oil Companies did not challeng e the

a pp ra ise d v a lue of

the oil ; t hey chal le ng e d th e a bil ity of Mid land Cou nty to t a x the oil

. Consequently , since the O il Com panies did not preva il on a claim “under Section 42.25 or 42.26,” attorney ’s fe es we re not authorized by Section 42.29. I f t he leg islature had intende d for attorney ’s fee s to be rec overa

ble in a case of this ty

pe, it could have included in its Section 42.29 authorization of a tt o r n e y ’ s f e e s a n a p p e a l c h a ll e n g in g th e in c lu s io n o f th e p r o p e rty o n th e a p p r a is a l r o ll , the deter mination of ownership, or the denial of a n exemption. The leg islature spec ifically authorized such protests in T EX
. T AX C ODE ANN . § 41.41(a) (Ve rnon 2008) ( listi ng nine distinct actions that may be prote sted by

taxpay er, inc luding: excessive va lue, unequa l appra isal, denial of a n exemption,12

owner ship, and inclusion on tax roll). The leg islature, howeve r, did not authorize attorney ’s fe es for

a ll s uc h p ro te sts . Se c tio n 4 2. 29 a uth or ize s a tto rn e y ’s fe e s f or on ly two di st in ct ty

pe s o f p ro te st: excessive value a

nd unequal a

ppraisal. Dallas Cent. Appraisal Dist. v. Seve n Inv. Co. , 835 S.W .2d 75, 77-79 (Te x . 1992). The O il Com panies’ protest cannot be categ orized as fa lling within either of those two. See id. The Oil Companies’ f irst issue is overruled. I n the sec ond issue, the Oil Companies asser t that MCAD waived a

ny complaint it had to the

a wa rd of a tto rn e y ’s fe e s b y

re qu e sti ngfi nd ing s o f f

a c t th a t su

pp or te d a n a wa rd of att orn ey ’s fe e s. We disag ree . MCAD repe atedly objected to issues re lated to the p ro s p ective awar d of attorne y ’s fe e s, a nd MCA D d id n ot r e qu e st a ny fi nd ing s o f f

a c t th a t w ou ld e nti tle th e Oi l Compa nie s to attorn ey ’s fe es or wa ive MCAD’s objec tion to such fees. MCAD me rely reque sted that the trial court amend its findings re g ardingattorney ’s fe es to omit the phrase “re cover able under Tax Code § 42.29.” The reque sted amendme nts refle cted MCAD’ s continued objec tion t o t h e award of attorney ’s fe es and c ontinued contention that the fe es we re not “ rec overa ble.” Moreove r, MCAD did not ask the trial cour

t to amend Conclus i o n of L aw No. 9, w here in the trial court c oncluded: “The Oil Companies are not entitled to attorney ’s fe es u nder Tax Code § 42.29.” MCAD did not waive its complaint to the aw ard of attorney ’s fees. The Oil Companies’ second issue is overrule d. V. Conclusion The judg ment of the trial c ourt is affir med.

J I M R. W RI GHT

CH I EF JUSTI CE Marc h 26, 2009 Panel consists of: Wright, C.J ., M c C a l l , J. , a n d

S t r a n g e , J.