YVONNE T. RODRIGUEZ, Justice
David E. Keltner, Kelly Hart & Hallman LLP, Fort Worth, C. Andrew Weber, Kelly Hart & Hallman LLP, Austin, for Appellant.
Kirk Swinney McCreary, Veselka, Braggs & Allen, P.C., Round Rock, TX, for Appellees.
OPINION
YVONNE T. RODRIGUEZ, Justice
This is an ad-valorem tax case of first impression tried to the bench. The issues in this appeal, like those in three other cases on our docket, concern the taxation of natural gas pipeline compressor packages. These compressor packages
facilitate the production and processing of natural gas by regulating the pressure necessary to extract it and move it. In this case, the trial court ruled—as urged by Appellant—that sixty-four compressor packages (twenty-four located in Reeves County and forty in Loving County on January 1, 2012) qualified as heavy equipment. But the trial court ruled—as urged by Appellees—that taxable situs lay in Reeves and Loving Counties, that the statutory formulas for calculating the market value of heavy equipment inventory held for lease or rent and the tax due on it were unconstitutional as applied, and that Appellant was not entitled to attorney's fees. On appeal, Appellant contends that the trial court erred in so ruling. We affirm, in part, and reverse and render, in part.
FACTUAL AND PROCEDURAL BACKGROUND
Appellant—MidCon Compression Services, L.L.C.—is in the business of renting compressor packages to third parties from eight yards located throughout Texas. MidCon maintains a fleet of 3,300 compressor packages, each of which has a useful life of approximately twenty years. The sixty-four compressor packages in dispute here were leased to three entities—Access, Chesapeake, and Concho Oil and Gas—from yards located in Ector and Gray Counties. In 2011, MidCon received lease payments in the amount of $6,999,023.00 for compressor packages assigned to its Ector County yard and $7,252,471.00 for those assigned to its Gray County yard.
That same year, the Legislature amended the statutes governing the taxation of heavy equipment inventory: Sections 23.1241 and 23.1242 of the Texas Tax Code. See Act of May 21, 2011, 82nd Leg., R.S., ch. 322, §§ 1, 2, 3, 2011 Tex.Gen.Laws 938, 938–40. Of particular importance were changes to the statutory definitions of “dealer,” “dealer's heavy equipment inventory,” “sales price,” and “total annual sales.” See id. at §§ 1, 2, 2011 Tex.Gen.Laws 938, 938–40; Tex.Tax Code Ann. § 23.1241(a)(1)(defining “dealer”), Tex.Tax Code Ann. § 23.1241(a)(2)(defining “dealer's heavy equipment inventory”), Tex.Tax Code Ann. § 23.1241(a)(7)(defining “sales price”), Tex.Tax Code Ann. § 23.1241(a)(9)(defining “total annual sales”)(West 2015). These changes, which became effective January 1, 2012, altered the formulas for calculating the market value of heavy equipment inventory and the tax due on it. See id. at §§ 9, 10, 2011 Tex.Gen.Laws 938, 941; Tex.Tax Code Ann. § 23.1241(b)(establishing formula for calculating market value of heavy equipment inventory for ad valorem purposes),
Tex.Tax Code Ann. § 23.124l(b–1)(clarifying that market value of item of heavy equipment lease or rented then sold is the sales price plus the lease and rental payments),
Tex.Tax Code Ann. § 23.1242(a)(4)(defining “unit property tax factor”),
Tex.Tax Code Ann. § 23.1242(b)(establishing formula for calculating the unit property tax of each item of heavy equipment).
Previously, only dealers holding items of heavy equipment inventory for sale (or for lease or rent with an option to purchase) could calculate the market value of their inventory based on sales for the previous tax year, divided by twelve. See Act of May 20, 1997, 75th Leg., R.S., ch. 1184, § 2, 1997 Tex.Gen.Laws 4564, 4565–68 (amended 1999); Act of May 28, 1999, 76th Leg., R.S., ch. 1550, §§ 1, 2, 1999 Tex.Gen.Laws 5337, 5337 (amended 2011). But beginning January 1, 2012, dealers holding items of heavy equipment inventory for lease or rent (not subject to an option to purchase) could calculate the market value of their inventory based on lease or rental payments for the previous tax year, divided by twelve. Thus, as amended, the formulas for calculating the market value of heavy equipment inventory and the tax due on it encompassed the total revenue generated by a dealer's entire inventory—through sales and lease or rental payments—for the previous tax year, divided by twelve. See Tex.Tax Code Ann. §§ 23.1241(b), 23.1241(b–1), 23.1242(a)(4), 23.1242(b).