Enbridge Energy, Limited Partnership v. Commissioner of Revenue, 8579-R

CourtTax Court of Minnesota
Writing for the CourtJane N. Bowman, Judge
PartiesEnbridge Energy, Limited Partnership, Appellant-Petitioner, v. Commissioner of Revenue, Appellee-Respondent.
Docket Number8579-R,8771-R,8631-R
Decision Date06 May 2021

Enbridge Energy, Limited Partnership, Appellant-Petitioner,
v.

Commissioner of Revenue, Appellee-Respondent.

Nos. 8579-R, 8631-R, 8771-R

Tax Court of Minnesota, Regular Division, Ramsey County

May 6, 2021


FINAL APPORTIONABLE MARKET VALUE AND ORDER FOR JUDGMENT

Jane N. Bowman, Judge

These consolidated matters came before The Honorable Jane N. Bowman, Judge of the Minnesota Tax Court, to determine the final apportionable market value of EELP's pipeline.

Paul B. Kilgore, Fryberger, Buchanan, Smith & Frederick, P.A., represents appellant-petitioner Enbridge Energy, Limited Partnership.

Jennifer A. Kitchak, Assistant Minnesota Attorney General, represents appellee-respondent Commissioner of Revenue.

EELP owns and operates an interstate petroleum pipeline system, known as the Lakehead system, in Minnesota and throughout the upper Midwest and elsewhere. The court previously determined the pipeline's unit value and the amount of that value attributable to Minnesota as of January 2, 2012, January 2, 2013, and January 2, 2014. Enbridge Energy, Ltd. P'ship v. Comm'r of Revenue, No. 8579-R et al., 2021 WL 935006, at *1 (Minn. T.C. Mar. 9, 2021).

Minnesota Rule 8100, which governs the valuation of formula-assessed pipeline property, provides in relevant part: "After the Minnesota portion of the unit value … is determined, any property which is non-formula-assessed or which is exempt from ad valorem tax, is deducted from the Minnesota portion of the unit value." Minn. R. 8100.0500, subp. 1. This deduction produces apportionable market value, the value to be distributed among the various Minnesota taxing districts in which pipeline property is located. Minn. R. 8100.0600, subp. 1. Having determined only the Minnesota portion of unit value-rather than apportionable market value-as of each assessment date, the court instructed the Commissioner to calculate the value of EELP's property "which is non-formula-assessed or which is exempt from ad valorem tax [and] is deducted" under Minn. R. 8100.0500. Enbridge Energy, 2021 WL 935006, at *2.

On April 9, 2021, the Commissioner submitted calculations, found at Exhibit A.[1] On April 12, 2021, EELP responded that it "has no objection to the Commissioner's calculations." [2] The court agrees with the parties, adopts the calculations submitted by the Commissioner, and determines final apportionable market value.

Based upon all the files, records, and proceedings herein, the court now makes the following:

FINDINGS OF FACT[3]

10. The court adopts the Commissioner's calculations of the value of EELP's non-formula-assessed and exempt property, found in Exhibit A, as reproduced below:

Plant Depreciation Percentage, 8100.500, subp. 3

2012

2013

2014

Total System Plant

$6, 208, 511, 953

$7, 119, 018, 355

$9, 086, 870, 337

Non-Depreciable Plant (CWIP + Land)

$514, 351, 280

$948, 330, 650

$1, 629, 897, 513

Depreciable Plant

$5, 694, 160, 673

$6, 170, 687, 704

$7, 456, 972, 824

Accumulated Depreciation

$1, 255, 911, 035

$1, 405, 703, 944

$1, 569, 025, 233

Plant Depreciation Percentage

22.0561%

22.7803%

21.0410%

Ratio of System Unit Value and Cost Less Depreciation, 8100.0500, subp. 3

System Unit Value

$3, 199, 718, 866

$3, 216, 940, 619

$3, 501, 716, 925

Net Book Value of Plant

$4, 952, 600, 918

$5, 713, 314, 411

$7, 517, 845, 104

Ratio of System Unit Value to Net PlantMinnesota Excludable Property, 8100.0500, subp. 1

64.6068%

56.3060%

46.5787%

Cost of Property Non-Depreciable Excludable

$82, 493, 381

$110, 262, 657

$110, 884, 671

Cost of Depreciable Excludable Property

$87, 049, 760

$86, 448, 616

$85, 129, 502

Depreciation Property on Depreciable Excludable

$19, 199, 782

$19, 693, 254

$17, 912, 099

Cost Less Property Depreciation of Excludable

$67, 849, 978

$66, 755, 362

$67, 217, 403

Total Excludable Depreciation) Property (Cost Less

$150, 343, 359

$177, 018, 019

$178, 102, 074

Value of Excludable Property to be Deducted from MinnesotaAllocable Value

$97, 132, 033

$99, 671, 766

$82, 957, 631

11. EELP's apportionable market value as of January 2, 2012, was $888, 611, 757 ($985, 743, 790 - $97, 132, 033).

12. EELP's apportionable market value as of January 2, 2013, was $816, 278, 086 ($915, 949, 852 - $99, 671, 766).

13. EELP's apportionable market value as of January 2, 2014, was $809, 630, 013 ($892, 587, 644 - $82, 957, 631).

ORDER

8. The court having reduced the system unit-value of EELP's pipeline operating system as of January 2, 2012, to $3, 199, 718, 866, and having adjusted the value attributable to Minnesota to $985, 743, 790, the Commissioner shall adjust the Minnesota apportionable value to $888, 611, 757, and shall reapportion the value accordingly among the affected counties.

9. The court having reduced the system unit-value of EELP's pipeline operating system as of January 2, 2013, to $3, 216, 940, 619, and having adjusted the value attributable to Minnesota to $915, 949, 852, the Commissioner shall adjust the Minnesota apportionable value to $816, 278, 086, and shall reapportion the value accordingly among the affected counties.

10. The court having reduced the system unit-value of EELP's pipeline operating system as of January 2, 2014, to $3, 501, 716, 925, and having adjusted the value attributable to Minnesota to $892, 587, 644, the Commissioner shall adjust the Minnesota apportionable value to $809, 630, 013, and shall reapportion the value accordingly among the affected counties.

11. The Commissioner shall equalize the reapportioned values as required by law.

12. Taxes due and payable in 2013, 2014, and 2015 shall be recomputed accordingly and refunds, if any, paid to EELP as required by such computations, together with...

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