Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Axiall, LLC v. Assumption Parish Board of Review

Court of Appeals of Louisiana, First Circuit

December 30, 2019

AXIALL, LLC
v.
ASSUMPTION PARISH BOARD OF REVIEW

          On Review from the 23rd Judicial District Court In and for the Parish of Assumption State of Louisiana No. 35890 consolidated with No. 36115 The Honorable Thomas J. Kliebert, Jr., Judge Presiding

          Jesse R. Adams, III Andre B. Burvant New Orleans, Louisiana Attorneys for Appellant Axiall, LLC

          Brian A. Eddington Baton Rouge, Louisiana Attorney for Appellee Wayne Blanchard, Assessor for Assumption Parish

          BEFORE: GUIDRY, McDONALD, McCLENDON, HOLDRIDGE, and LANIER, JJ.

          McCLENDON, J.

         Axiall, LLC appeals a district court judgment that reversed the decisions of the Louisiana Tax Commission (the Commission) and reinstated the ruling of the Assumption Parish Board of Review (the Board), which ruling upheld the correctness of an ad valorem tax assessment by Assumption Parish Assessor, Wayne "Cat" Blanchard (the Assessor). For the reasons that follow, we reverse the district court's judgment and reinstate the decisions of the Louisiana Tax Commission.

         FACTS AND PROCEDURAL HISTORY

         This appeal arises from petitions for judicial review to the 23rd Judicial District Court filed by the Assessor, contesting various decisions rendered by the Commission for tax years 2014, 2015, and 2016 (the tax years) regarding property owned by Axiall, LLC (Axiall).[1] The assessments of six brine wells and caverns owned by Axiall for the tax years are at issue. Pursuant to the procedures established by the Louisiana Administrative Procedures Act, Axiall first petitioned the Board for correction of the Assessor's valuation of the six brine wells and caverns at issue. The Board upheld each assessment. Axiall thereafter sought relief from the Commission.

         The Commission heard the appeals for tax years 2014 and 2015 on August 9, 2016; the appeal for tax year 2016 was heard by the Commission on February 1, 2017. In each appeal and for each tax year, the Commission reversed the Board, as more fully later explained. For purposes of judicial review, the appeals were consolidated and the 23rd Judicial District Court held a hearing on November 16, 2017. The district court took the matter under advisement and, on December 19, 2017, signed a judgment that reversed and vacated the Commission's decisions and affirmed the correctness of the assessments for the tax years by reinstating the ruling of the Board.

         Axiall owns six solution brine wells in Assumption Parish. The six brine wells bear serial numbers 142314, 142315, 142316, 158778, 973089, and 973515, and are otherwise identified as wells #1, #2, #3, #4, #5, and #6, respectively. Each well has an associated cavern; thus, there are also six caverns. Each cavern bears the same number as its associated well. The terms "well" and "cavern" are often used interchangeably because the well and cavern are thought of as one; however, separate appraisals are performed for each of the components. Axiall owns the land upon which wells and caverns 1, 2, 3, 4, and 6 are located. Another entity, Texas Brine Company, LLC, owns the land upon which well 5 and its associated cavern sit. Wells and caverns 1, 2, 3, 4, and 6 are taxed under assessment number 3700004005, and well and cavern 5 are taxed under assessment number 3700004013.

         The brine wells owned by Axiall are operated by a third-party, and the brine derived therefrom is transported via pipeline to Axiall's plant in Plaquemine to make various products. Axiall extracts brine from the wells by injecting water into the ground, and as the brine is extracted, a void or hole within the salt mass in the ground is created. Thus, the caverns within the salt mass are created as a byproduct of the mining operations; the purpose of the mining is not to create the cavern. The wells at issue are not used in connection with oil and gas production purposes.

         No hydrocarbons or other products have been stored on a commercial basis in the caverns created as a result of Axiall's brine mining operations, and Axiall has never had an intention of using any of the caverns for commercial storage. Further, the Department of Natural Resources has never permitted the caverns to be used for commercial storage; rather, the Department of Natural Resources has exclusively permitted the brine mining wells and associated caverns for use in the mining of brine. In addition, if Axiall sought to store hydrocarbons in the caverns, it would be legally unable to do so because the cavern walls are too close to one another to meet the requirements per the Department of Natural Resources regulations for hydrocarbon storage. Other than extracting salt, Axiall has used the cavern associated with well number 3 to dispose of mined minerals that are not useful in its manufacturing process including calcium carbonate and magnesium hydroxide. Axiall described its use of cavern number 3 as simply returning the unused minerals to the ground. The Assessor asserts cavern number 3 has value as a disposal cavern, so it has a commercial purpose and should be assessed as such.

         The Assessor retained a consulting firm, Pritchard & Abbott, Inc. (P&A), to estimate the fair market value of the brine wells and caverns for the tax years. P&A is a private appraisal consulting firm based in Texas that performs appraisals of complex properties, including minerals, industrial, utility, and personal property related to the oil and gas fields. The work performed by P&A in Louisiana is two-fold. First, P&A consults with parish assessors directly on individual property appraisals on an as-needed basis.[2] Secondly, P&A works with the Louisiana Assessor's Association and, in that capacity, participates in Rules and Regulation hearings before the Commission regarding potential changes to the Rules and Regulations. P&A participates in hearings related to numerous Chapters of the Commission's Rules and Regulations, including Chapters 9 and 25, the Chapters at issue here.

         In performing individual assessments, P&A consultants follow the Commission's Rules and Regulations. In valuing the wells and caverns at issue, P&A utilized Chapter 25 of the Commission's Rules and Regulations to appraise and value the properties using a replacement cost new formula. Axiall maintains that wells and caverns should not be valued under Chapter 25, but rather, under Chapter 9.

         In the past, P&A has made recommendations to the Commission to alter the language in Chapter 9 to clarify that brine wells and caverns used in brine production are not to be valued in accordance with Chapter 9 and are rather to be valued in accordance with Chapter 25. To effect this change, P&A recommended clarifying that the only injection wells to which Chapter 9 should apply were those applicable to oil and gas production or those oil and gas wells that have been converted from production wells to injector wells for salt water disposal purposes. The recommended changes, which would have made Chapter 25 the Chapter under which to assess brine wells, were rejected by the Commission.

         For tax year 2014, Axiall initially filed with the Assessor a Personal Property Tax Report - Oil and Gas Property (Form LAT 12) and a Personal Property Tax Report -Pipelines (Form LAT 14). Form LAT 12 included a notation regarding the caverns, noting as follows: "A cavern is created by the mining of these brine wells. These caverns are a part of the well and not a separate taxable property. These caverns are not used for commercial purposes." The Assessor responded to these forms with a letter notifying Axiall that the caverns are, under law, considered "commercial improvements" and are subject to ad valorem taxation. The letter further notified Axiall that the caverns should be reported like other commercial improvements using Form LAT 5. In response to the Assessor's letter, Axiall submitted the requested ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.