Susan Combs, Comptroller of Public Accounts of the State of Texas, and Greg Abbott, Attorney General of the State of Texas v. STP Nuclear Operating Company
This case involves an appeal by Susan Combs, Comptroller of Public Accounts of the State of Texas, and Greg Abbott, Attorney General, against STP Nuclear Operating Company. STP, a Texas corporation operating the South Texas Nuclear Project, procured insurance from Nuclear Electric Insurance Limited (NEIL), an unlicensed insurer in Texas. STP paid an independently procured insurance tax under protest and sought a refund, arguing the tax was unconstitutional and violated the McCarran-Ferguson Act. The trial court ruled in favor of STP. However, the Texas Court of Appeals, Third District, found that STP’s significant in-state activities related to the insurance procurement established a sufficient nexus for Texas to levy the tax. Therefore, the appellate court reversed the trial court's judgment and rendered judgment in favor of the Comptroller, upholding the constitutionality of the tax as applied to STP.