Trailblazer Pipeline Co. v. State Bd. of Equalization and Assessment, s. 88-707

• Decision Date: 14 July 1989
• Docket Number: Nos. 88-707,88-708,s. 88-707
• Citation: 232 Neb. 823,442 N.W.2d 386
• Parties: TRAILBLAZER PIPELINE COMPANY, Appellant, v. STATE BOARD OF EQUALIZATION AND ASSESSMENT, Appellee. NATURAL GAS PIPELINE COMPANY OF AMERICA, Appellant, v. STATE BOARD OF EQUALIZATION AND ASSESSMENT, Appellee.
• Court: Nebraska Supreme Court

Page 386

442 N.W.2d 386

232 Neb. 823

TRAILBLAZER PIPELINE COMPANY, Appellant, v. STATE BOARD OF EQUALIZATION AND ASSESSMENT, Appellee.

NATURAL GAS PIPELINE COMPANY OF AMERICA, Appellant, v. STATE BOARD OF EQUALIZATION AND ASSESSMENT, Appellee.

Nos. 88-707, 88-708.

Supreme Court of Nebraska.

July 14, 1989.

Syllabus by the Court

State Equalization Board: Taxation: Valuation: Appeal and Error. As to a centrally assessed public service entity taxpayer under the provisions of Neb.Rev.Stat. §§ 77-802 et seq. (Reissue 1986 & Cum.Supp.1988), where the State Board of Equalization and Assessment made a final decision with respect to the valuation of the property of such taxpayer and the record contains the information disclosing the basis for such decision and assessment and alleged error, the taxpayer being affected by such decision is entitled to prosecute an appeal to this court under the authority of Neb.Rev.Stat. § 77-510 (Cum.Supp.1988).

William R. Johnson of Kennedy, Holland, DeLacy & Svoboda, Omaha, and Bruce J. McWhirter of Ross & Hardies, Chicago, Ill., for appellants.

Robert M. Spire, Atty. Gen., and L. Jay Bartel, Lincoln, for appellee.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT and FAHRNBRUCH, JJ.

HASTINGS, Chief Justice.

These two cases, although briefed separately, were consolidated for argument. Trailblazer Pipeline Company (Trailblazer) and Natural Gas Pipeline Company of America (NGPL) are both public service entities within the meaning of Neb.Rev.Stat. § 77-801 (Reissue 1986). They have each appealed from the order of the State Board of Equalization and Assessment (the Board) to equalize all centrally assessed property valued by the state through application of a statewide "aggregate level of assessment" determined by the Department of Revenue (the Department) to be 88.7 percent of actual value.

The assignments of error generally are that the Board incorrectly assessed their property at a higher level of valuation than other properties and, further, that the Board failed to equalize that portion of their correlated system value with the personal property of railroads and carline companies; i.e., none of the personal property of the railroads and carline companies was assessed, therefore neither should the personal property of these appellants be taxed. The last assignment of error relates to questions of state constitutional uniformity and proportionality and federal constitutional questions of equal protection.

With one exception relating to standing as to NGPL to be later noted, the issues in these appeals are identical to the issues in and are controlled by our opinion in Northern Natural Gas Co. v. State Bd. of Equal., 232 Neb. 806, 806, 443 N.W.2d 249 (1989).

Regarding the standing issue, Neb.Rev.Stat. § 77-510 (Cum.Supp.1988) provides in part: "From any final decision of the State Board of Equalization and Assessment with respect to the valuation of any real or personal property, any person, county, or municipality affected thereby may prosecute an appeal to the Supreme Court."

The Board contends that NGPL, having failed to appear before the Board at its August 2, 1988, hearing or to otherwise request action of the Board, lacks standing to bring an appeal.

In Northern Natural Gas Co., supra, attorneys for Enron Liquids Pipeline Company and Northern Natural Gas Company appeared before the August 2, 1988, meeting of the Board and participated fully in the hearings, examining and cross-examining witnesses, offering various exhibits and testimony, and addressing the Board in summation, generally objecting to the recommendation made by the Department to equalize centrally assessed property at 88.7 percent and to the failure of the Board to equalize public service entities with railroads and carline companies.

The 1988 public service entity values on a system basis and on a Nebraska portion basis for Enron, Trailblazer, and NGPL all were made a part of the record.

Attorney William R. Johnson appeared at the hearing, representing Trailblazer, and in the course of his participation cross-examined Dennis Donner, an employee of the Department, regarding the assessment of railroad and carline companies as the result of federal litigation referred to in Northern Natural Gas Co., supra. Also found in the record is an affidavit in reference to Trailblazer of William V. Collins, an employee of NGPL, concerning the activities of both Trailblazer and NGPL as to the nature of pipelines of both companies being personal property.

The August 12, 1988, "Notice of Public Service Company Valuation for Assessment Year 1988," which refers to the enclosure of an appraisal for Trailblazer and NGPL adjusted to an aggregate assessment sales ratio of 88.7 percent, and inviting a protest to be filed within 30 days, was mailed to a Mr. McKenna at 701 East 22nd Street, P.O. Box 1207, Lombard, IL 60148, and received separately on behalf of Trailblazer and NGPL. Found in the record is a "Notice of Appeal and Request for Transcript" filed by NGPL with the Board within 30 days of the Board's final decision.

A Nebraska property franchise report including a schedule of property and valuations was filed with the Department on behalf of Trailblazer. Included within Nebraska schedule VII of that report is the account title: "Trailblazer Pipeline Company is a General Partnership among NGPL-Trailblazer, Inc., Columbia Gulf Transmission Company and Enron Trailblazer Pipeline Company. Subsidiaries of Natural Gas Pipeline Company of America, The Columbia Gas System, Inc. and Enron Corp., Inc., respectively."

Also part of the record includes "FERC Form No. 2: Annual Report of Major Natural Gas Companies." The identification sheet of that report, page 1, gives the Lombard, Illinois, address previously mentioned, and names as the contact person James T. Ashworth, vice president, accounting and control, Natural Gas Pipeline Company of America, operator.

On page 102 of the foregoing report is a schedule called Control Over Respondent. The respondent is named as Trailblazer Pipeline Company, with the accompanying statement that "[a]t December 31, 1987, Trailblazer was a partnership equally owned by NGPL-Trailblazer Inc., a wholly owned subsidiary of Natural Gas Pipeline Company of America (Natural), a wholly owned subsidiary of United Energy Resources, Inc....."

Trailblazer and the Department entered into a stipulation which recites that Trailblazer is a public service entity; that 96 percent of Trailblazer's system value consists of pipelines; and that the total value system-wide of Trailblazer's real and tangible personal property is $155,000,000, and the amount of that value apportioned to the State of Nebraska is $112,604,400.

A notice of the meeting of the Board set for 2 p.m., August 2, 1988, inviting all interested persons to appear, was published in newspapers in Lincoln, Grand Island, Norfolk, North Platte, and Scottsbluff.

The parties have not pointed out to the court, nor have we been able to find in the record, a property franchise report filed on behalf of NGPL, or anything in the way of a written or oral protest filed with the board by NGPL other than as its position as a partner of Trailblazer. There is nothing by way of a final order of the Board setting forth the valuations assigned to property belonging to NGPL, or for Enron or Trailblazer for that matter, other than the letter of August 12 previously mentioned, which simply states that NGPL's property will be equalized by evaluating all property of centrally assessed taxpayers at 88.7 percent, the aggregated value of all property in the state, including that of centrally assessed taxpayers whose property is valued at 100 percent.

It is on the basis of this record that the Board claims that NGPL has no standing to bring this appeal. In spite of the provision of § 77-510, previously cited, which grants the right of appeal to the Supreme Court to any person who is affected by a decision of the Board, the Board cites two cases which it contends support its position: Laflin v. State Board of Equalization and Assessment, 156 Neb. 427, 56 N.W.2d 469 (1953), and DeCamp v. State Board of Equalization and Assessment, 203 Neb. 366, 278 N.W.2d 619 (1979).

In Laflin, a landowner in Johnson County appealed from the action of the Board in refusing to properly equalize the assessment of farmlands in the various counties of the state for the tax year 1952. Nineteen counties had been notified to appear before a meeting of the Board to show cause why the assessments of land and improvements in such counties should not be raised. Although no notice of an intended increase or decrease of assessment had been served upon Johnson County, an appearance was made on the county's behalf at the Board's hearing by the county attorney and one county commissioner. In addition, Laflin appeared with legal counsel and protested the valuations and assessments made in Johnson County as being excessive and proportionately higher than those on like property in other counties, arguing that this had the effect of requiring him to pay a disproportionate share of the state property tax. The Board disposed of the contentions of the representatives of the county and of Laflin by stating that it " 'decided to take no action towards reducing the assessed value of farm lands and improvements in Johnson County.' " Laflin, supra at 430, 56 N.W.2d at 472-73.

In Laflin, the Attorney General argued before this court that the Board could take no action toward reducing the assessed value of farmlands and improvements in Johnson County, since no notice had been given. The Attorney General then contended that Laflin's remedy was not a direct appeal to this court but, rather, was to mandamus the Board to give the required notice if a prima facie case could be made. This court disagreed, saying:

It was evidently the intention of the Legislature to afford relief to any person,...