COURT OF APPEALS 

SECOND DISTRICT OF TEXAS 

FORT WORTH 

NO. 02-15-00343-CV 

PARKER COUNTY APPRAISAL 

DISTRICT 

 APPELLANT

V. 

BOSQUE DISPOSAL SYSTEMS, 

LLC, AGNUS SWD SERVICES, 

L.P., GORDON SWD SERVICES, 

L.P., AND BOB PHILLIPS D/B/A 

PHILLIPS WATER HAULING 

 APPELLEES

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FROM THE 415TH DISTRICT COURT OF PARKER COUNTY 

TRIAL COURT NO. CV12-1573 

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OPINION1

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 1This appeal was originally submitted to a panel consisting of Justices 

Walker, Dauphinot, and Meier. After submission, the court on its own motion 

elected to consider the appeal en banc. 
2 

I. INTRODUCTION

This appeal from a final judgment incorporating a summary judgment 

involves whether Appellant Parker County Appraisal District’s assessment of four 

subsurface saltwater disposal wells separately from and in addition to the tracts 

of land on which the wells are located is void. The trial court granted summary 

judgment for the landowners, Appellees Bosque Disposal Systems, LLC; Agnus 

SWD Services, L.P.; Gordon SWD Services, L.P.; and Bob Phillips d/b/a Phillips 

Water Hauling (collectively, Owners), who contended that the value of the wells 

is subsumed within the value of their land; thus, the separate assessment and 

taxation of the income stream from the operation of those wells resulted in them 

being taxed twice on the same property. The Appraisal District challenges the 

trial court’s ruling in a single issue. Because controlling authority compels the 

conclusion that Owners’ real property interest in the saltwater disposal wells may 

be separately assessed and taxed, we will reverse the trial court’s judgment, 

render a summary judgment for the Appraisal District on the controlling question 

of law, and remand the case to the trial court. 

II. FACTUAL AND PROCEDURAL BACKGROUND

 Owners own tracts of land in Parker County, Texas.2 Subsurface saltwater 

 2Only Phillips’s property contains surface improvements unrelated to the 

saltwater disposal wells. The appraisal of Phillips’s land includes separate 

categories for the land itself and the surface improvements––warehouses and 

office buildings––located on the land. 
3 

disposal wells are located underneath each Owner’s tract.3 In 2012, 2013, and 

2014, the Appraisal District appraised each of the subsurface saltwater disposal 

wells separately from Owners’ tracts of land and any surface improvements. 

Owners filed protests with the Parker County Appraisal Review Board, 

challenging the separate valuation of the saltwater disposal wells on the 

appraisal rolls.4 See Tex. Tax Code Ann. § 41.41(a) (West 2015). After the 

Appraisal Review Board denied their protests, Owners filed petitions for review in 

the 415th District Court of Parker County, seeking de novo review of the 

Appraisal Review Board’s decisions. See id. § 42.21 (West 2015), § 42.23 (West 

Supp. 2016). 

In their petitions for review, Owners contended that because the Appraisal 

District had already appraised the real property upon which the wells are located, 

additional assessment based on the income stream from the wells subjected the 

land to “multiple appraisals for the same property.”5 Owners sought several 

remedies: (1) a declaratory judgment that the separate appraisal accounts 

 3These wells are used to return saltwater and chemicals produced as a 

byproduct of oil and gas drilling to the subsurface of land so as to reduce surface 

pollution. 

4All but Phillips challenged the 2012–14 appraised values; Phillips 

challenged only the 2013 and 2014 appraised values. 

5They also alleged that the wells were not adequately described as 

required by the tax code and sought declaratory relief on that independent basis. 

See Tex. Tax Code Ann. § 25.03(a) (West 2015) (“Property shall be described in 

the appraisal records with sufficient certainty to identify it.”). 
4 

created for the assessment of the saltwater disposal wells are void; (2) a 

correction of the appraisal rolls in accordance with tax code 25.25(c); and (3) a 

reduction of the appraised value of the wells under tax code sections 42.24, 

42.25, and 42.26. Id. §§ 42.24–.26 (West 2015). 

Because the factual basis upon which the Appraisal District separately 

assessed the wells is undisputed, Owners filed a joint motion for summary 

judgment contending that as a matter of law, the tax code does not authorize the 

Appraisal District to separately value and tax the saltwater disposal wells and the 

fee simple surface tracts. Thus, they sought to have the trial court render a 

declaratory judgment that the separate accounts and appraised values for the 

wells are void. After the Appraisal District filed a combined response and 

competing motion for summary judgment, the trial court granted Owners’ motion 

and denied the Appraisal District’s, declaring the four accounts related to the 

saltwater disposal wells “void as illegal double taxation.” One month later, the 

trial court rendered a final judgment for Owners in which it denied their 

supplemental request for attorney’s fees. The Appraisal District perfected a 

timely appeal from the final judgment. 

III. STANDARD OF REVIEW

 We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 

315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the 

light most favorable to the nonmovant, crediting evidence favorable to the 

nonmovant if reasonable jurors could and disregarding evidence contrary to the 
5 

nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp 

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every 

reasonable inference and resolve any doubts in the nonmovant’s favor. 20801, 

Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A plaintiff is entitled to 

summary judgment on a cause of action if it conclusively proves all essential 

elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 

S.W.2d 59, 60 (Tex. 1986). 

When both parties move for summary judgment and the trial court grants 

one motion and denies the other, the reviewing court should review both parties’ 

summary judgment evidence and determine all questions presented. Mann 

Frankfort, 289 S.W.3d at 848. The reviewing court should render the judgment 

that the trial court should have rendered. See Myrad Props., Inc. v. LaSalle Bank 

Nat’l Ass’n, 300 S.W.3d 746, 753 (Tex. 2009); Mann Frankfort, 289 S.W.3d at 

848. 

When reviewing a summary judgment granted on specific grounds, the 

summary judgment can only be affirmed if the ground on which the trial court 

granted relief is meritorious. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 

625–26 (Tex. 1996). But if a party preserves the other grounds presented that 

were not ruled on by the trial court, a court of appeals may consider these other 

grounds that the trial court did not rule on. Id. at 626. To preserve the grounds, 

the party must raise them in the summary judgment proceeding and present 

them in an issue or cross-point on appeal. Id. at 625–26. 
6 

IV. SUMMARY JUDGMENT MOTIONS

Owners moved for summary judgment on two grounds: (1) the Appraisal 

District separately assessed and taxed a nonexisting separate interest in the 

saltwater disposal wells, and (2) even if a separate property interest exists, the 

tax code does not permit it to be taxed separately from and in addition to the 

surface tract. Owners argued that the saltwater disposal wells are not separate 

estates or interests in land because their surface and subsurface estates have 

not yet been severed by conveyance. Owners thus contend that the value 

attributable to the wells is subsumed in the already-appraised value of the land 

and that by separately appraising an interest related to the subsurface wells, the 

Appraisal District is essentially taxing the only properly taxable interest, i.e., the 

land, twice using different appraisal methods. They also contend that the 

saltwater disposal wells do not fit within any category of taxable real property set 

forth in the tax code. 

The Appraisal District did not request specific relief in its motion for 

summary judgment and response––such as a final judgment in its favor or the 

dismissal of all of Owners’ claims; therefore, it appears the Appraisal District 

sought to have the trial court determine the preliminary legal issue of whether the 

saltwater disposal well interests can be separately assessed and taxed under the 

law. See Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex. 1999); TriCounty Elec. Coop., Inc. v. GTE Sw. Inc., 490 S.W.3d 530, 546 n.8 (Tex. App.––
7 

Fort Worth 2016, no pet.). The arguments in its motion are directly responsive to 

Owners’ arguments in their motion. 

The summary judgment evidence shows that the Appraisal District valued 

the saltwater disposal wells on each Owner’s tract based on an appraisal 

performed by Pritchard & Abbott, a tax consulting and appraisal firm that has 

been hired by several Texas counties. That firm is the only one in Texas that 

uniformly appraises these types of facilities using an income approach rather 

than simply placing a value on the personal property associated with the well. 

The wells were valued based on a uniform formula created by Pritchard & Abbott; 

the formula takes into account the well’s past and forecasted revenue stream6

and deducts a uniform percentage for operating expenses. Pritchard & Abbott 

developed its income model around 2007 to 2008. Pritchard & Abbott did not 

take the fair market value of the surface estates into account when conducting 

the separate appraisals in the accounts associated with the wells. 

Owners included in their summary judgment evidence a Pritchard & Abbott 

report explaining the firm’s appraisal methods for these types of saltwater 

disposal facilities. According to the report, a commercial disposal well has both 

personal and real property requiring valuation. The personal property consists of 

the above-ground equipment and hardware; “[t]he real property is the interest or 

 6The projected revenue stream is based on past numbers of barrels 

disposed of and future projected barrels disposed of, based on records from the 

Railroad Commission. 
8 

rights associated with injection into the subsurface of the land.” In other words, 

Pritchard & Abbott’s appraisal model values landowners’ “right to inject into [the] 

subsurface formation” on their land. A Pritchard & Abbott employee testified by 

deposition that although the Appraisal District could “roll . . . up” or include the 

value of an income-producing saltwater disposal well in an appraisal of the 

surface land, that “is not done.” 

The summary judgment evidence also shows that working interest owners 

of oil and gas leases often maintain saltwater disposal facilities on the leasehold 

itself. According to Pritchard & Abbott’s report summary, “[a] leasehold disposal 

well’s value is already captured in the working interest owner’s mineral interest 

value which is enhanced by the costs savings derived by not using a commercial 

vendor (i.e., no middle-man fees).” Thus, Pritchard & Abbott, at least, appears to 

maintain that the only taxable value of a saltwater disposal well located on leased 

land and used in connection with a subsurface mineral interest is an 

enhancement to the fair market value of the mineral estate. In contrast, 

according to Pritchard & Abbott, valuation of a commercial disposal facility’s 

ability to inject into the land’s subsurface is “best accomplished with the income 

approach to value where[in] the appraiser converts an estimated future 

profitability potential of the property to current market value.” Therefore, “[t]he 

relevant income to analyze is net of all expenses of operation and taxes; in other 

words, the profitability (or lack of it).” This income approach lies whether the right 

to inject is severed or not, but if severed, typically, the owner has no operating 
9 

expenses to deduct. Using the market approach to appraise the value of such a 

facility is difficult because Texas does not require purchasers of property 

interests to disclose how much they paid for those interests. 

V. OWNERS’ INTERESTS IN THE SALTWATER DISPOSAL WELLS MAY BE 

SEPARATELY ASSESSED UNDER THE TEXAS CONSTITUTION AND TAX CODE

Article VIII, section 1 of the Texas constitution provides that “[t]axation 

shall be equal and uniform” and that “[a]ll real property and tangible personal 

property in this State, unless exempt . . . shall be taxed in proportion to its value, 

which shall be ascertained as may be provided by law.” Tex. Const. art. VIII, § 

1(a)–(b). The prohibition against double taxation derives from this “Equal and 

Uniform” provision of the Texas constitution. TracFone Wireless, Inc. v. Comm’n 

on State Emergency Commc’ns, 397 S.W.3d 173, 180 (Tex. 2013). The 

supreme court has clarified that “double taxation” for purposes of constitutional 

jurisprudence means something different than taxing the same property twice. 

Id. (“[T]he problem is not so much that two taxes are assessed; the problem is 

that the double-tax burden is imposed on some taxpayers but not on others. This 

unequal imposition is what offends common constitutional requirements of 

uniformity.”); see Tarrant Appraisal Dist. v. Colonial Country Club, 767 S.W.2d 

230, 234 (Tex. App.––Fort Worth 1989, writ denied) (explaining that taxing 

property according to an incorrect classification does not result in double taxation 

so long as all of those within the class are treated equally); Parr v. State, 743 

S.W.2d 268, 274 (Tex. App.––San Antonio 1987, writ denied) (“The fact that 
10 

taxes were assessed separately on the ‘surface’ and ‘subsurface’ estates did not 

result in double taxation.”). Although Owners’ brief states that the effect of the 

separate assessment of the wells constitutes “illegal double taxation,” the gist of 

their summary judgment argument was that because the taxation of the wells as 

a separate property interest is not authorized by the tax code, the Appraisal 

District is subjecting their land––which they contend is the only taxable estate––

to improper multiple assessments. In re Nestle USA, Inc., 387 S.W.3d 610, 620 

(Tex. 2012) (“A property tax is equal and uniform only if it is in proportion to 

property value.”). 

“[T]he Legislature may constitutionally draw distinctions in the manner in 

which market value of property is determined for ad valorem tax purposes, as 

long as the classifications are not unreasonable, arbitrary, or capricious.” Enron 

Corp. v. Spring ISD, 922 S.W.2d 931, 936 (Tex. 1996). The tax code defines 

“real property” as including land, improvements, mines, quarries, minerals in 

place, standing timber, or “an estate or interest, other than a mortgage or deed of 

trust creating a lien on property or an interest securing payment or performance 

of an obligation,” in land, improvements, mines, quarries, minerals in place, or 

standing timber. Tex. Tax Code Ann. § 1.04(2) (West 2015); Matagorda Cty. 

Appraisal Dist. v. Coastal Liquids Partners, L.P., 165 S.W.3d 329, 332 (Tex. 

2005). The supreme court has explained that “[a] single tract may include 

several of these aspects of realty, or perhaps even all,” and that “[a]t least some 

of these aspects of real property can be taxed separately even though all are part 
11 

of the same surface tract” because of the potential overlap of the categories 

delineated in section 1.04(2). Coastal Liquids, 165 S.W.3d at 332, 334. Section 

25.02 of the tax code provides that appraisal records must include both “real 

property” and “separately taxable estates or interests in real property.” Tex. Tax 

Code Ann. § 25.02 (West 2015). 

Contrary to Owners’ argument in their motion for summary judgment, the 

supreme court has squarely held that the separate taxation of different aspects of 

the same tract of land “does not depend on whether each aspect is separately 

owned, as identical properties cannot be taxed differently depending on whether, 

for example, a mineral interest has been legally severed.” Coastal Liquids, 165 

S.W.3d at 332 (citing State v. Fed. Land Bank of Houston, 329 S.W.2d 847, 849 

(Tex. 1959)). In State v. Federal Land Bank of Houston, the supreme court held 

that a county’s taxing system of separately assessing severed mineral estates 

but not separately assessing unsevered mineral estates was illegal under the 

equal and uniform clause of the Texas constitution. 329 S.W.2d at 848–50; see 

also Duval Cty. Ranch Co. v. State, 587 S.W.2d 436, 444 (Tex. Civ. App.––San 

Antonio 1979, writ ref’d n.r.e.) (concluding that it was not improper for county to 

assess taxes separately on surface and subsurface mineral estates of land even 

when there had not yet been a conveyance of any part of the mineral estate to a 

third party), cert. denied, 449 U.S. 1077 (1981). Therefore, Owners’ argument 

that Texas law expressly prohibits the separate assessment of the surface and 
12 

subsurface absent a severance and conveyance of all or part of the subsurface 

estate is incorrect. 

Owners contend that a taxable estate or interest cannot merely “spring into 

existence” for taxation purposes without some legal act such as a conveyance 

and that their permit from the Railroad Commission does not create a taxable 

interest under the tax code. But the possibility of using the subsurface of their 

land to dispose of saltwater brine byproduct if they could obtain the necessary 

permits was already included as part of their rights in the fee simple estates they 

own. See Evanston Ins. Co. v. Legacy of Life, Inc., 370 S.W.3d 377, 382–83 

(Tex. 2012) (“The ‘bundle of rights’ concept is appropriate because property does 

not refer to a thing but rather to the rights between a person and a thing.”). 

Owners further contend that the descriptions of the types of real property 

that may be taxed is limited by and must fit squarely into one of the types of 

interests listed in chapter 25 of the tax code; otherwise, those interests may not 

be valued and taxed separately from the land. See Tex. Tax Code Ann. §§ 25.05 

(life estates), 25.06 (generally, property encumbered by a leasehold or other 

possessory interest and property encumbered by a mortgage, deed of trust, or 

other interest securing payment or the performance of an obligation), 25.07 

(certain types of leasehold interests), 25.08 (improvements), 25.09 

(condominiums and planned unit developments), 25.10 (standing timber), 25.11 

(property owned in undivided interests), 25.12 (mineral interests), 25.13 (exempt 
13 

property subject to contract of sale), 25.135 (qualifying trusts) (West 2015).7 

Although courts are to strictly construe tax statutes in the taxpayer’s favor if in 

doubt about their scope,8 the supreme court has held that the tax code “does not 

expressly require real property to be listed in the six categories used to define it 

[in section 1.04(2)]. To the contrary, the Code explicitly requires separate 

records of the appraised value of land, improvements, and separate interests, but 

not of mines, minerals, or timber.” Coastal Liquids, 165 S.W.3d at 334. 

According to the supreme court, “some of the categories used to define real 

property clearly overlap,” making it “difficult to draw the line between these 

categories,” and because “a fee-simple estate is clearly ‘an estate or interest . . . 

in property’ [under section ] 1.04(2)(F), this last category necessarily overlaps to 

some degree with all the former ones.” Id. & n.24. The supreme court has 

cautioned that the conclusion that property “should escape taxation entirely 

 7Owners argued that these provisions of the tax code “expressly prohibit[] 

the taxation of lesser estates apart from a non-exempt fee simple estate.” This is 

an overstatement of the scope of chapter 25; most leaseholds, for instance, are 

taxed to the fee simple owner while mineral interests––regardless of whether 

they are separately owned––are taxed to the mineral interest owner. See Tex. 

Tax Code Ann. §§ 25.06, .07; Destec Props. Ltd. P’ship v. Freestone Cent. 

Appraisal Dist., 6 S.W.3d 601, 606 (Tex. App.––Waco 1999, pet. denied) 

(explaining that when land is encumbered by a leasehold, property owner is 

assessed value of both encumbered land and leasehold interest because of 

unique nature of such property). 

8See, e.g., Calvert v. Tex. Pipe Line Co., 517 S.W.2d 777, 781 (Tex. 

1974); Tex. Unemployment Comp. Comm’n v. Bass, 151 S.W.2d 567, 570 (Tex. 

1941). Owners correctly cite this principle of statutory construction, but we 

cannot rely on it to hold contrary to supreme court precedent. See Lubbock Cty., 

Tex. v. Trammel’s Lubbock Bail Bonds, 80 S.W.3d 580, 585 (Tex. 2002). 
14 

because it [is] unclear which of the Code’s appellations should apply . . . would 

raise difficult constitutional questions.” Id. at 334–35 (citing the Texas 

constitution’s equal and uniform clause). Moreover, even if an appraisal district 

taxed an aspect of real property under an incorrect subcategory of section 

1.04(2), that aspect of the property would not be exempt from taxation if the 

property description used in the appraisal roll gave the owner “notice of what 

property was included in each tax account (and thus some assurance that it was 

not included twice).”9 Id.; cf. Tex. Att’y Gen. Op. No. GA-0790 (2010) (opining 

that no state law directly addresses whether land and improvements owned by 

same taxpayer must be combined into a single account and concluding that 

whether to assess land and other taxable real property interests in a separate or 

a single account “is an administrative determination made by the chief 

appraiser”). 

The Tyler court of appeals has considered the same issue in a 2014 

appeal involving the same type of disposal wells and the same method of 

appraisal by Pritchard & Abbott. In Key Energy Services, LLC v. Shelby County 

 9The supreme court also held that even if the manmade salt dome caverns 

at issue in that case could be considered to be part of the “land,” they could still 

be taxed separately from the remainder of the land. Coastal Liquids, 165 S.W.3d 

at 334–35. Thus, Owners’ attempt to distinguish Coastal Liquids because those 

caverns could be considered to be an “improvement” is unpersuasive. Id. at 330, 

335. Likewise, Owners’ argument that the property descriptions are insufficient 

to allow foreclosure of a tax lien is not persuasive as the descriptions are 

sufficient to give notice of the interest that is being separately taxed. See id. at 

365. 
15 

Appraisal District, a jury trial case, the Tyler court considered whether the trial 

court had erred as a matter of law by allowing the Shelby County Appraisal 

District to attribute a separate value to the right to inject saltwater into the land’s 

subsurface “because lesser estates are generally nontaxable as separate 

interests.” 428 S.W.3d 133, 145 (Tex. App.––Tyler 2014, pet. denied). Relying 

primarily on Coastal Liquids, but not engaging in a detailed analysis, the Tyler 

court held that the landowners’ right to inject into wells that were “in active 

commercial use” was a taxable estate or interest under tax code section 

1.04(2)(F). Id. at 146 (citing Evans v. Ropte, 96 S.W.2d 973, 974 (Tex. 1936); 

Davis v. Vidal, 151 S.W. 290, 293 (1912); Lochte v. Blum, 30 S.W. 925, 927 

(1895); Shepard v. Galveston, Houston & Henderson Ry. Co., 22 S.W. 267, 268 

(1893)). Owners attempt to distinguish the cases cited in Key because “each . . . 

involves a conveyance of some kind,” but as we have discussed above, it is not 

the severance of the surface and subsurface estates by conveyance that gives a 

taxing authority the right to assess different types of property interests. 

Owners rely on Cherokee Water Co. v. Gregg County Appraisal District for 

the proposition that the saltwater disposal wells may not be taxed separately and 

must be included in the land value. 801 S.W.2d 872 (Tex. 1990). The plaintiff in 

Cherokee Water Co. owned all of Lake Cherokee and numerous acres 

surrounding the lake that it leased to its shareholders; many of the lessees had 

built homes and other improvements on the leased land. Id. at 873–74. The 

Gregg County Appraisal District appraised the property based on its potential 
16 

development use, but Cherokee Water Co. contended that it should only be 

assessed a reversionary interest in the land because all of the land was 

encumbered by leases, thus limiting the land’s use and diminishing its value. Id.

at 874–75. The supreme court held that the then-newly amended section 

23.01(b) of the tax code––providing that “each property shall be appraised based 

upon the individual characteristics that affect the property’s market value”––did 

not change the courts’ long-standing interpretation of sections 25.06 and 25.07 of 

the tax code, and their prior versions, that real property taxes of land 

encumbered by a leasehold are assessed against the lessor rather than the 

lessee. Id. at 875–76; see Tex. Tax Code Ann. § 23.01(b) (West Supp. 2016), 

§§ 25.06, 25.07. Thus, Cherokee Water Co. is a statutory construction case that 

is inapposite to the multiple appraisal issue. 

Although Owners contend that the case held that the Tax Code “expressly 

prohibit[s] the taxation of lesser estates apart from a non-exempt fee simple 

estate,” the statutes upon which the Cherokee holding is based––Tax Code 

sections 25.06 and 25.07––speak only to leaseholds and mortgages, not other 

estates or interests in real property. Id. §§ 25.06–.07; see also Dallas Cent. 

Appraisal Dist. v. Jagee Corp., 812 S.W.2d 49, 51–52 (Tex. App.––Dallas 1991, 

writ denied) (holding that, for taxation purposes, value of lesser leasehold estate 

was to be included in valuation and assessment of fee simple estate; thus, full 

assessment of fee simple estate included not only the market value of the fee 
17 

simple unencumbered by a lease but also the “present right to receive income in 

the form of rent”). 

Owners also rely on Gregg County Appraisal District v. Laidlaw Waste 

Systems, Inc. in support of their argument that the tax code does not authorize 

the separate valuation and taxation of a right to inject into the subsurface. 907 

S.W.2d 12 (Tex. App.––Tyler 1995, writ denied) (op. on reh’g). In Laidlaw, the 

court of appeals held that the trial court did not abuse its discretion by refusing to 

admit for the jury’s consideration on rule 403 grounds an appraisal that was 

expressly based in part on value attributable to Laidlaw’s landfill operation permit 

from the State of Texas and other intangibles. Id. at 19–20; see also Tex. Tax 

Code Ann. §§ 1.04(6) (including “permit” in definition of “intangible personal 

property”), 11.02(a) (providing that intangible personal property is not taxable 

except as provided by insurance or finance code) (West 2015); Tex. R. Evid. 

403. Because Laidlaw leased the land on which it operated the landfill, the 

landowner was responsible for the assessment. Laidlaw, 907 S.W.2d at 15, 18 

(noting that landowner had designated predecessor of lessee as agent for ad 

valorem tax purposes); see Tex. Tax Code Ann. § 25.06. The court of appeals 

held that the admission of the appraisal would have risked confusing the jury 

because it was impossible to tell whether the appraised land value was derived 

from the use of the land itself or the use of the “capital, trucks, equipment, 

machinery, trained personnel, contracts, and business acumen” used by Laidlaw 

in running the landfill. Laidlaw, 907 S.W.2d at 20. 
18 

Owners contend that the Appraisal District assessed their saltwater 

disposal wells based on the value of their Railroad Commission permits allowing 

them to use the land for regulated injection purposes and that the assessment is 

thus faulty for the same reason as the appraisal evidence in Laidlaw. But the 

summary judgment evidence does not show that the Appraisal District placed 

any value on the Railroad Commission’s permits or other intangible property in 

valuing the interest associated with the saltwater wells. Instead, the Appraisal 

District based its assessment on the Pritchard & Abbott appraisal that calculated 

a three-year average revenue and deducted forty-five percent for estimated 

operating expenses. An income-based appraisal model can be appropriately 

employed by a taxing authority and is authorized by the tax code, depending on a 

property’s individual characteristics. See Tex. Tax Code Ann. § 23.01(a), (b) 

(providing that all taxable property is appraised at market value, that market 

value must be determined using generally accepted accounting methods and 

techniques, and that while similar methods and techniques must be used in 

appraising similar property, “each property shall be appraised based upon the 

individual characteristics that affect the property’s market value”), § 23.0101 

(providing that in determining market value, chief appraiser “shall consider the 

cost, income and market data comparison methods of appraisal and use the 

most appropriate method”) (West 2015); Travis Cent. Appraisal Dist. v. FM 

Props. Operating Co., 947 S.W.2d 724, 734 (Tex. App.––Austin 1997, writ 

denied) (explaining that “[t]he standard definition of value applied to income-
19 

producing property is the present worth of future benefits expected to be derived 

from ownership”); cf. Destec Props., 6 S.W.3d at 605 (explaining that use of 

income method of appraisal is more appropriate than other methods when 

valuing overriding royalty interest “because the value of the interest lies primarily 

in its income-producing potential”). Accordingly, the principles upon which 

Laidlaw is based are not controlling here either. 

We hold that the trial court erred by granting judgment for Owners on the 

ground that the Appraisal District illegally subjected them to multiple 

assessments on the same property. We also hold that the trial court erred by 

denying the Appraisal District’s motion for summary judgment on the ground that 

the accounts are not void because it separately assessed Owners’ interests in 

the saltwater disposal wells. Therefore we sustain the Appraisal District’s sole 

issue. 

VI. CONCLUSION

Because controlling authority does not support the preserved ground upon 

which Owners filed their motion for summary judgment––that they were subject 

to illegal multiple assessments for the same land,10 we hold that the trial court 

 10Although Owners moved for summary judgment on the ground that the 

separate accounts for the saltwater disposal wells are void under the tax code for 

lack of an adequate property description, the trial court did not grant summary 

judgment for that reason, nor did Owners file a notice of appeal or cross-issue 

seeking summary judgment on that ground. Thus, we do not address whether 

the trial court should have granted summary judgment for that reason. See

Cates, 927 S.W.2d at 625–26. Moreover, we do not address any of the other 

claims included in Owners’ petitions for review––including whether the Appraisal 
20 

erred by granting Owners a summary judgment declaring the accounts void as 

illegal double taxation. Because the trial court also erred by denying the 

Appraisal District’s motion for summary judgment seeking to resolve the legal 

question of the propriety of its separate assessment of the land and associated 

saltwater disposal wells, we render summary judgment for the Appraisal District 

solely on that issue as raised in its motion. Because the final judgment was 

based on the summary judgment for Owners, we reverse the trial court’s 

judgment, and we remand the case to the trial court for further proceedings 

consistent with this opinion. 

/s/ Sue Walker 

SUE WALKER 

JUSTICE 

EN BANC 

MEIER, J., filed a dissenting opinion, in which GARDNER and SUDDERTH, JJ., 

join. 

DELIVERED: December 1, 2016 

 

District unequally valued Owners’ saltwater disposal facilities––because neither 

party sought summary judgment relief on those claims.