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TBM-WC Sabine, LLC v. Sabine Parish Board of Review

Court of Appeals of Louisiana, Third Circuit

July 18, 2018

TBM-WC SABINE, LLC
v.
SABINE PARISH BOARD OF REVIEW

          APPEAL FROM THE ELEVENTH JUDICIAL DISTRICT COURT PARISH OF SABINE, NO. 67, 678 HONORABLE STEPHEN B. BEASLEY, DISTRICT JUDGE

          William R. Huguet Kean Miller LLP Phyllis D. Sims Kean Miller LLP Attorneys for TBM-WC Sabine, LLC: Plaintiff/Appellant

          Brian A. Eddington Attorney for Sabine Parish Assessor, Cindy Manasco: Defendant/Appellee

          Robert D. Hoffman, Jr. APLC Attorney for The Louisiana Tax Commission: Amicus Curiae

          Court composed of Sylvia R. Cooks, Billy H. Ezell, and John E. Conery, Judges.

          Ezell, J. concurs.

          SYLVIA R. COOKS, JUDGE

         FACTS AND PROCEDURAL HISTORY

         TBM-WC Sabine, LLC (TBM) owns a natural gas pipeline and surface equipment at its Amine facility, all located within Sabine Parish, Louisiana. TBM filed a tax return, known as a rendition, with the Sabine Parish Tax Assessor's office for tax year 2015. In its rendition TBM set forth the dimensions and age of its "Toledo Bend-Wildcat system" pipeline (pipeline) which it identified as comprising "approximately 12.5 miles of 16[inch] trunkline and 19 miles of 10 [inch] trunkline." According to documents submitted by TBM, nineteen miles of ten-inch pipeline were installed in 2013 at a total cost of $6, 317, 880 and twelve and nine-tenths miles of sixteen-inch pipeline were installed from 2009-11, at a total cost of $6, 967, 071. The document further indicates that nineteen miles of this pipeline is in 96% good condition and twelve and nine-tenths miles is in 86-91% good condition. Additionally, TBM provided information that the surface equipment at its Amine facility was installed between 2002 and 2010 at a total cost of $1, 426, 140. TBM stated the facility was idle at the time of its tax filing but the pipeline was still in use. TBM asserted in its submission to Sabine Parish Assessor Cindy Manasco (Assessor Manasco) that the combined fair market value of the pipeline and surface equipment should ultimately be valued for 2015 tax purposes at $1, 979, 600 based on an 85% reduction in fair market value for obsolescence of both the pipeline and the surface items comprising its idle facility.

         Applying the information provided by TBM, Assessor Manasco, using a State approved series of tax tables[1], calculated the base fair market value of the facility. This valuation is not disputed. In its rendition, TBM requested a reduction in fair market value asserting obsolescence for both its surface equipment and pipeline. In an exhibit in support of this request TBM describes the pipeline's current capabilities as follows: "Gas can easily flow north and south across the system at any given time with existing access to multiple takeaway pipeline operators." In addition to this information, TBM provided Assessor Manasco an unaudited, unauthored, single-page financial statement captioned "Toledo Bend Midstream Holdings, LLC and Subsidiaries Consolidated Income Statements" covering the period of December 31, 2013 to December 31, 2014. Toledo Bend Midstream Holdings, LLC is the parent company of TBM and other subsidiaries. This one-page income statement for the parent holding company does not delineate information specific to TBM Sabine, LLC. TBM also provided a single-page document, with no supporting data, purportedly showing the utilization percentage of its Wildcat pipeline. These documents and information were the only items submitted to Assessor Manasco in support of TBM's requested 85% reduction in the assessed value of its pipeline. Assessor Manasco found the information regarding obsolescence of the pipeline insufficient to establish the requested 85% reduction for fair market valuation of the pipeline. Instead, she applied a 12% reduction for obsolescence regarding the pipeline and a 90% reduction in the assessed value of TBM's surface equipment for its facility. Assessor Manasco assessed TBM's property for the tax year 2015 in Assessment No. 2754, placing an assessed value on TBM's pipeline and surface equipment of $13, 840, 600 resulting in an ad valorem tax bill for TBM's Sabine Parish property of $192, 500.

         TBM did not protest the 90% reduction concerning its surface equipment. It did, however, appeal the 12% obsolescence reduction for the pipeline to the Sabine Parish Board of Review[2] (the Board) asserting the reduction was too low for its pipeline at the Amine facility. TBM did not appear at the hearing before the Board and did not submit any additional information to the Board. The Board upheld Assessor Manasco's assessed value of the pipeline.

         TBM appealed the Board's decision to the Louisiana Tax Commission (LTC). It submitted additional information and testimony at the hearing before the LTC which it did not submit to Assessor Manasco to support its request for obsolescence, though available to it at the time of filing its rendition. LTC issued a Decision and Order awarding an additional 10% obsolescence on the pipeline for a total reduction in assessed value of 22%. LTC did not articulate any factual basis for its decision nor did it find that Assessor Manasco abused her discretion. LTC made no mention of its findings regarding the ruling of the Board subject to its review. Additionally, LTC did not find that Assessor Manasco's appraisal of the fair market value of the pipeline was in any way incorrect or that it was not made in conformity with the tables promulgated by LTC.

         LTC's ruling resulted in a new assessed value of TBM's property at the Amine facility placing the fair market value of the property at $12, 456, 540, reducing TBM's net ad valorem tax bill for 2015 to $173, 000.

         Assessor Manasco appealed LTC's ruling to the Eleventh Judicial District Court which reversed and vacated the LTC's ruling and reinstated the decision of the Board upholding Assessor Manasco's assessed fair market value of TBM's pipeline and her 12% reduction for obsolescence. TBM appeals the judgment of the district court alleging four assignments of error.

         TBM's Assignments of Error

         1. In accordance with the Louisiana Administrative Procedure Act (La.R.S. 49:964(G), the district court applied the incorrect standard of review to the LTC's decision, as it wholly failed to demonstrate that ...


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