Enbridge Energy, Limited Partnership v. Commissioner of Revenue

• Decision Date: 06 May 2021
• Docket Number: 8579-R,8771-R,8631-R
• Parties: Enbridge Energy, Limited Partnership, Appellant-Petitioner, v. Commissioner of Revenue, Appellee-Respondent.
• Court: Tax Court of Minnesota

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...