HomeMy WebLinkAboutMINUTES - 12191995 - C109 Z>. 1
C.109,C.1101
C.111, and C.112,
THE BOARD OF SUPERVISORS OF
CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on December 19, 1995 , by the following vote
AYES: Supervisors Rogers, Smith, DeSaulnier, Torlakson and Bishop
NOES: None
ABSENT: None
ABSTAIN: None
SUBJECT: Correspondence
C..109 CLAIM dated December 1, 1995, on behalf of Southern Pacific Pipelines Partnership, L.P.,
by Eugene L. Hahm, Cooper, White and Cooper, 201 California Street, 17th Floor, San
Francisco CA 94111, on State assessed unitary property for assessment year 1991 .
**** REFERRED TO TREASURER-TAX COLLECTOR, COUNTY COUNSEL AND ASSESSOR.
C.110 LETTER dated December 6, 1995, from Joyce Hawkins, Mayor, City of Orinda, 26 Orinda
Way, Orinda, CA 94563, requesting the Board to reconsider its December 5, 1995, approval
of the EI Toyonal Bridge Removal Project.
****REFERRED TO PUBLIC WORKS DIRECTOR FOR RECOMMENDATION.
CA 11 LETTER dated December 7, 1995, from Joseph Canciamilla, Mayor, City of Pittsburg, Civic
Center, Pittsburg, CA 94565, requesting the Board not allocate monies from its Developer
Fee Funds with prior discussion with the City.
***REFERRED TO COMMUNITY DEVELOPMENT DIRECTOR
CA 12 LETTER dated December 8, 1995, from Jeffrey Butler, Regional Manger, Century
Communications, 992 San Pablo Avenue, Albany, CA 94706, advising of changes in its
rate structure for equipment, standard installation, and service effective January 12, 1995.
****REFERRED TO CABLE T.V. ADMINISTRATOR
IT IS BY THE BOARD ORDERED that the recommendations as noted (****) are
approved.
I hereby certify that this Is a true and correct copy of
an action taken and enteredard of Su on
onnIto tthe minutes of the
ATTESTED•= l�O�s1I.h��fA/Z. 19_9s�
PHIL BATCHELOR,Clerk of the Board
of Supervisors and Cgunty Administrator
c.c. Correspondents
Treasurer Tax Collector By 'Deputy
County Counsel
Assessor
Public Works Director
Community Development Director
Cable T.V. Administrator
C7, 1(29
D I•
� 7
LAW OFFICES OF
A PARTNERSHIP INCLUDING COOPER, WHITE FSC COOPER CONTRA COSTA OFFICE
PROFESSIONAL CORPORATIONS 20I CALIFORNIA STREET SEVENTEENTH FLOOR 1333 N CALIFORNIA BLVD
WALNUT CREEK
TELECOPIER(415)433-5530 SAN FRANCISCO CALIFORNIA 94111 CALIFORNIA 94596
TELEX 262877 SCOOP (510)935-0700
X415) 433-1900
December 1, 1995 RECE•8 ED
. ku - 4 1995
Via Federal Express
BOARD OF SUPERVISORS
Clerk, Board of Supervisors CONTRA COSTA CO.
Contra Costa
Board of Supervisors
651 Pine Street, Rm. 106
Martinez, CA 94553
Attn: Shirley Casillas
Re: SFPP, L.P. - Verified Claim for Refund
Assessment Year 1991
Dear Clerk:
This firm represents SFPP, L.P. Enclosed please find
an original and three copies of the Verified Claim for Refund for
assessment year 1991. Please file the original Claim, endorse-
file stamp any copies not needed by the Board, and return the
endorsed-file stamped copies to this office in the envelope
provided.
Please telephone me collect to clarify any questions
you have regarding this matter.
Very truly yours,
g7e"O-v /W�
Eugene L. Hahm
RLD: lis
Enclosures
cc: SFPP, L.P.
147530.1
BEFORE THE BOARD, OF SUPERVISORS
COUNTY OF CONTRA COSTA
In regard to Ad Valorem ) VERIFIED CLAIM FOR REFUND
Property Taxes paid by SFPP, )
L.P. , formerly known as )
SOUTHERN PACIFIC PIPE LINES ) Tax Bill No. :
PARTNERSHIP, L.P. on State )
Assessed Unitary Property with) Letters 10/10/91 & 2/21/92
respect to assessment year )
1991 )
I.
AMOUNT OF CLAIM
SFPP, L.P. , formerly known as SOUTHERN PACIFIC PIPE
LINES PARTNERSHIP, L.P. ("Claimant") pursuant to California
Revenue and Taxation Code Sections 5096; 5097 and 5097.02 submits
this claim for refundof ad valorem property taxes on Claimant's
state assessed unitary property for assessment year 1991 paid on
property valued as of the lien date January 1, 1991..
Claimant owns and operates a refined_ petroleum products
-intercounty .pipeline system within the State of California and
five other western states which is assessed on a unitary basis by
the State Board of Equalization ("the Board") pursuant to Article
XIII, Section 19, of the California Constitution, the applicable
provisions of the California Revenue and Taxation Code, and Rules
of the Board. For assessment year 1991, the Board also assessed
on a unitary basis Claimant's lands and rights of way. . The Board
had no jurisdiction to assess-Claimant's lands and rights of way.
The total assessed value originally determined by the Board,
1
h.
including both .Claimant's pipeline property over which the Board
had jurisdiction, and Claimant's lands and rights of way, over
which the Board had no jurisdiction, was $560, 000, 000. (This
assessed value was later reduced to $538, 000, 000 by the Board. )
A portion of the total assessment so determined by .the
Board was allocated to this county pursuant to the California
Revenue and Taxation Code sections 745, 755, and 756. Thereafter
Claimant paid ad valorem property taxes on such portion of such
assessment to this county. The 1991 assessment determined by the
Board of Claimant's state assessed unitary property is void in
part, 'to 'the extent "that "it"iridluded assessment of Claimant's
lands and rights-of-way, over which the Board had no
jurisdiction. The portion of the Board's assessment allocated to
this county is void in part, for the same reason. Additionally,
the 1991 assessment is .void, in part, to the extent that it .
included an assessment of Claimant's leaseholds and easements
which are tax-exempt, as the privately-owned lands subject to
these leaseholds and easements are taxed at full value to their
owners. The taxes paid were erroneously or illegally collected,
or in the alternative illegally assessed or levied, to the extent
that they were levied or collected on the assessed value of
Claimant's lands and rights-of-way over which the Board had no
jurisdiction, and (as to leaseholds and easements) which were
tax-exempt.
The portion of the assessment allocated to this county
on Claimant's lands and rights of way which is void and the
2
amount of taxes paid by Claimant to this county on the purported
assessed value of Claimant's lands and rights of way for which
refund is sought is set forth in attached Exhibit A, which is
incorporated by reference as part of this Claim for Refund.
II.
GROUNDS ON WHICH THE CLAIM IS FOUNDED
The ground on which the claim for refund of tax is
based are: (a) the taxes were erroneously or illegally
collected; and/or ('b) the taxes were illegally assessed or
levied. The taxes were erroneously or illegally collected, or
illegally assessed or-levied, -because th-d-"B'oard*'s assessment
included an assessment of Claimant's lands and rights of way over
which the Board had no jurisdiction under Article XIII,
Section 19 of the California Constitution, the applicable
provisions of the California Revenue and Taxation Code, and
controlling judicial authority.
A. Statement of Facts.
Claimant is a Delaware limited partnership formed in
1988 to own and operate the refined petroleum products pipeline
system of Santa Fe Pacific Corporation. Claimant is publicly
traded, with 56 percent of its ownership in public hands.
Claimant was formerly known as Southern Pacific Pipelines
Partnership, L.P. . (The name only has been changed; the entity is
the same. ) The pipeline system was previously owned by two
indirect wholly-owned subsidiaries of Santa Fe Pacific
3
Corporation: Southern Pacific Pipelines, Inc. and San Diego.
Pipeline Company.
Claimant, a common carrier, is subject to regulation by
the California Public Utilities Commission (the "CPUC") with
respect to intrastate shipments through its pipeline -system and
the Federal Energy Regulatory Commission (the "FERC") with
respect to interstate shipments through its pipeline system.
Claimant's pipeline system is located principally on leased
rights ,of way or other leased property. The rights-of-way in
which much of the pipeline system is located are already taxed at
fair market value.
B. Elements of the Assessment Contested.
Claimant does not challenge the assessed values derived
from the Board's application of its property assessment methods
to Claimant's various properties. The Board's assessment is
illegal, erroneous and void because the Board improperly included
in its assessment certain. property of Claimant over which the
Board lacks jurisdiction under the California Constitution, the
applicable provisions of. the Revenue and Taxation Code, and
controlling judicial authority. In particular, the Board
assessed the lands and rights of way of Claimant notwithstanding
the fact that Article XIII, Section 19 of the California
Constitution does not extend to the assessment of such properties .
and Revenue and Taxation Code section 721 only confers upon. the
Board jurisdiction to assess property "that is to be assessed by
it pursuant to Section 19 of Article XIII of the Constitution. "
4
V
Instead, Claimant's lands and rights-of-way can only be legally
the subject of local assessment, if at all. The Board's
assessment .of this property therefore violated California
Constitution Article XIII, Section 19, and Revenue and Taxation
Code section 721.
C. Legal Background.
In General Pipeline Co. v. Board of Equalization, 5
Cal. 2d 253 (1936) ("General Pipeline") , the California Supreme
Court defined "pipeline" under then Article XIII, Section 14 of
the California Constitution, the predecessor of Article XIII,
Section 19. The -Court-excluded elands and -rights--of -way from its
definition. Moreover, immediately after General Pipeline was
decided, the Board properly deleted from its reporting
instructions the reporting requirement for lands and rights .of
way. The Board continued its administrative practice of not
assessing lands and rights of way every year for 48 years, before
improperly resuming its assessment of lands and rights of way.
Exclusion of lands and rights of way from the constitutional
definition of "pipeline" is therefore mandated not only by
General Pipeline, but also by the Board's many years of
administrative practice of excluding lands and rights of way from
the definition.
In Southern Pacific Pipe Lines, Inc. v. State' Board of
Equalization, 14 Cal. App. 4th 42 (1993) ("Southern Pacific") ,
the Court of Appeal reaffirmed that as a matter of law lands and
rights-of-way are not included within the definition of
5
"pipeline" in California Constitution Article XIII, Section 19.
The Court of Appeal construed the decision in General Pipeline
"as barring the SBE from assessing the lands and rights-of-way of
private, intercounty oil pipelines. " (14 Cal. App. 4th at 53) .
Moreover, to the extent that the Board included in its
assessment leaseholds, easements, and other interests in
privately-owned land less than fee interests, the assessment of
these interests created illegal double taxation. As to leasehold
estates, the owner of the fee is deemed to be the owner of the
whole estate for the purposes of taxation. Graciosa Oil Co. v.
County 'of-Santa -Barbara; -15-5-Ca1. -14-0--,(-1-909) a - The 1-and-subject
to these leaseholds and easements is taxed at full value to its
owners. The value of the ownership interest includes the value
of all lesser interests, which are accordingly tax-exempt. Other
owners of leaseholds and easements are not assessed on the value
of these interests. This discriminatory assessment was in
violation of Claimant's rights of due process and equal
protection under Article I, Section 7 of the California
Constitution and Amendment XIV, Section 1 of the United States
Constitution.
III.
NOTICE
Any notice, communication or inquiry regarding this
claim should be sent to: Mr. Jerry W. Jones, Director, Taxes and
Administration, SFPP, L.P. , 888 So. Figueroa St. , 2d Floor, Los
Angeles, California 90017..
6
IV.
PRAYER FOR RELIEF
THEREFORE, it is respectfully requested that this Board
of Supervisors issue an order directing the appropriate officials
to refund to Claimant no less than the amount described in the
preceding Section- land set forth on Exhibit A hereto, or such
other amounts as .may be determined to be lawfully refundable,
plus interest thereon allowed by law.
Dated: November , 1995, at Los Angeles,
California.
-"-SFPP,'-L:P. , a-'Delaware Limited
Partnership,
By its General Partner SANTA FE
PACIFIC PIPELINES, I
h';r'01
BY
Gary L. /swim
Assist Treasurer
Of counsel:
Robert L. Dunn, ' Esq.
Peter W. Michaels, Esq.
Cooper, White & Cooper
201 California Street, 17th Floor
San Francisco, CA 94111
(415/433-1900)
7
VERIFICATION
I am Assistant Treasurer of SANTA FE PACIFIC PIPELINES,
INC. , general partner of SFPP, L.P. a Delaware Limited
Partnership, and am authorized to make this verification for and
on behalf of SFPP; L.P. I have read the annexed Claim For Refund
of SFPP, L.P. Based on such information as is available to SFPP,
L.P. , I am informed and believe that the matters stated in the
document are true and correct and on that ground allege that the
matters stated therein are true and correct.
I declare under penalty of perjury that the foregoing
"is-true-'and'-correct; -and -that-this Verification -is -executed--thyis
day of November, 1995 at Los Angeles, Califor ia.
Gary L. im
146654.1
8
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RECEI :Ofl
BEFORE THE BOARD OF SUPERVIS RS DEC 4
COUNTY OF CONTRA COSTA
pFRR gO .FRO OF CONTRA CO
SO
In regard to Ad Valorem ) VERIFIED CLAIM FOR REFUND
Property Taxes paid by SFPP, )
L.P. , formerly known as )
SOUTHERN PACIFIC PIPE LINES ) Tax Bill No. :
PARTNERSHIP, L.P. on State )
Assessed Unitary Property with) Letters 10/10/91 & 2/21/92
respect to assessment year )
1991 )
I.
AMOUNT OF CLAIM
SFPP, L.P. , formerly known as SOUTHERN PACIFIC PIPE
LINES PARTNERSHIP, L.P. ("Claimant") pursuant to California
Revenue and Taxation Code Sections 5096, 5097 and 5097.02 submits
this claim for refund of ad valorem property taxes on Claimant's
state assessed unitary property for assessment year 1991 paid on
property valued as of the lien date January 1, 1991
Claimant owns and operates a refined petroleum products
intercounty pipeline system within the State of California and
five other western states which is assessed on a unitary basis by
the State Board of Equalization ("the Board") pursuant to Article
XIII, Section 191 of the California Constitution, the applicable
provisions of the California Revenue and Taxation Code, and Rules
of the Board. For assessment year 1991, the Board also assessed
on a unitary basis Claimant's lands and rights of way. . The Board
had no jurisdiction to assess 'Claimant's lands .and rights of way.
The total assessed value originally determined by the Board,
1
including both Claimant's pipeline property over which the Board
had jurisdiction, and Claimant's lands and rights of way, over
which the Board had no jurisdiction, was $560, 000,000. (This
assessed value was later reduced to $538,000,000 by the Board. )
A portion of the. total assessment so determined by the
Board was allocated to this county pursuant to the California
Revenue and Taxation Code sections 745, 755, and 756: Thereafter
Claimant paid ad valorem property taxes on such portion of such
assessment to this county. The 1991 assessment determined by the
Board of Claimant's state assessed unitary property is void in
part, to the extent that it included assessment of Claimant's
lands and rights-of-way, over which the Board had no
jurisdiction. The portion of the Board's assessment allocated to
this county is void in part, for the same reason. Additionally,
the 1991 assessment is void, in part, to the extent that it
included an assessment of Claimant's leaseholds and easements
which are tax-exempt, as the privately-owned lands subject to
these leaseholds and easements are taxed at full value to their .
owners. The taxes paid were erroneously or illegally collected,
or in the alternative illegally assessed or levied, to the extent
that they were levied or collected on the assessed value of
Claimant's lands and rights-of-way over which- the Board had no
jurisdiction, and (as to leaseholds and easements) which were
tax-exempt.
The portion of the assessment allocated to this county
on Claimant's lands and rights of way which is void and the
� 2
amount of taxes paid by Claimant to this county on the purported
assessed value of Claimant's lands and rights of way for which
refund is sought is set forth in attached Exhibit A, which is
incorporated by reference as part of this Claim for Refund.
II. '
GROUNDS ON WHICH THE CLAIM IS FOUNDED
The ground on which the claim for refund of tax is
based are: (a) the taxes were erroneously or illegally
collected; and/or (b) the taxes were illegally assessed or
levied. The taxes were erroneously or illegally collected, or
illegally assessed or levied, "because the Board's assessment
included an assessment of Claimant's lands and rights of way over
which the Board had no jurisdiction under Article XIII,
Section 19 of the California Constitution, the applicable
provisions of the California Revenue and Taxation Code, and
controlling judicial authority.
A. Statement of Facts.
Claimant is a Delaware limited partnership formed ,in
1988 to own and operate the refined petroleum products pipeline
system of Santa Fe Pacific Corporation. Claimant is publicly
traded, with 56 percent of .its ownership in public hands.
Claimant was formerly known as Southern Pacific Pipelines
Partnership, L.P. (The name only has been changed; the entity is
the same. ) The pipeline system was previously owned by two
indirect wholly-owned subsidiaries of Santa Fe Pacific
3
Corporation: Southern Pacific Pipelines, Inc. and San Diego
Pipeline Company.
Claimant, a common carrier, is subject to regulation by
the California Public Utilities Commission (the "CPUC") with
respect to intrastate shipments through its pipeline system and
the Federal Energy Regulatory Commission (the "FERC") with
respect to interstate shipments through its pipeline system.
Claimant's pipeline system is located principally on leased
rights of way or other leased property. The rights-of-way in
which much of. the pipeline system is located are already taxed at
fair market value.
B. Elements of the Assessment Contested.
Claimant does not challenge the assessed values derived
from 'the Board's application of its property assessment methods
to Claimant's various properties. The Board's assessment is
illegal, erroneous and void because the Board improperly included
in its assessment certain property of Claimant over which the
Board lacks jurisdiction under the California Constitution, the
applicable provisions of the` Revenue and Taxation Code, and
controlling judicial authority. In particular, the Board
assessed the lands and rights of way of Claimant notwithstanding
the fact that Article XIII, Section 19 of the California
Constitution does not extend to the assessment of such properties
and Revenue and Taxation Code section 721 only confers upon the
Board jurisdiction to assess -property "that is to be assessed by
it pursuant to. Section 19 of Article XIII of. the Constitution. "
4
Instead, Claimant's lands and rights-of-way can only be legally
the subject of local assessment, if at all. The Board's
assessment .of this property therefore violated California
Constitution Article XIII, Section 19, and Revenue and Taxation
Code section 721.
C. Legal Background.
In General Pipeline Co. v. Board of Equalization, 5
Cal. 2d 253 (1936) ("General Pipeline") , the California Supreme
Court defined "pipeline" under then Article XIII, Section 14 of
the California Constitution, the predecessor of Article XIII,
Section 19. The Court excluded lands and rights of way from its
definition. Moreover, immediately after General Pipeline was
decided, the Board properly deleted from its reporting
instructions the reporting requirement for lands and rights of
way. The Board continued its administrative practice of not
assessing lands and rights of way every year for 48 years, before
improperly resuming its assessment of lands and rights of way.
Exclusion of lands and rights of way from the constitutional
definition of "pipeline" is therefore mandated not only by
General Pipeline, but also by the Board's many years of
administrative practice of excluding lands and rights of way from
the definition.
In Southern Pacific Pipe Lines. Inc. V. State Board of
Equalization, 14. Cal. App. 4th 42 (1993) ("Southern Pacific") ,
the Court of Appeal reaffirmed that as a matter of law lands and
rights-of-way are not included within the definition of
5
"pipeline" in California Constitution Article XIII, Section 19.
The Court of Appeal construed the decision in General Pipeline
"as barring the SBE from assessing the lands and rights-of-way of
private, intercounty oil pipelines." (14 Cal. App. 4th at 53) . '
Moreover, to the extent that the Board included in its
assessment leaseholds, easements, and other interests in
privately-owned land less than fee interests, the assessment of
these interests created illegal double taxation. As to leasehold
estates, the owner of the fee is deemed to be the owner of the
whole estate for the purposes of taxation. Graciosa Oil Co. v. -
County of- Santa Barbara, 155 Cal. 140 (1909) . The land subject
to these leaseholds and easements is taxed at full value to its
owners. The value of the ownership interest includes the value
of all lesser interests, which are accordingly tax-exempt. Other
owners of leaseholds and easements are not assessed on the value
of these interests. This discriminatory assessment was in
violation of Claimant's rights of due process and equal
protection under Article I, Section 7 of the California
Constitution and Amendment XIV, Section 1 of .the United States
Constitution.
III.
NOTICE
Any notice, communication or inquiry regarding this
claim should be sent to: Mr. Jerry W. Jones, Director, Taxes and
Administration, SFPP, L.P. , 888 So. Figueroa St. , 2d Floor, Los
Angeles, California 90017..
6
IV.
PRAYER FOR RELIEF
THEREFORE, it is respectfully requested that this Board
of Supervisors issue an order directing the appropriate officials
to refund to Claimant no less than the amount described in the
preceding Section 1 and set forth on Exhibit A hereto, or such
other amounts as may be determined to be lawfully refundable,
J
plus interest thereon allowed by law.
Dated: November �� , 1995, at Los Angeles,
California. r
-SFPP - .-L-P. , a 'Delaware Limited
Partnership,
By its General Partner SANTA FE
PACIFIC PIPELINES, I
ByA"zn"',, '. 3
Gary L. im
Assist Treasurer
Of counsel:
Robert L. Dunn, Esq.
Peter W. Michaels, Esq.
Cooper, White & Cooper
201 California Street, 17th Floor
San Francisco, CA 94111
(415/433-1900)
7
. I r
VERIFICATION
I am Assistant Treasurer of SANTA FE PACIFIC PIPELINES,
INC,. , general partner of SFPP, L.P. a Delaware Limited
Partnership, and am authorized to make this verification for and
on behalf of SFPP, L.P. I have' read the annexed Claim For Refund
of SFPP, L.P. Based on such information as is available to SFPP,
L.P. , I am informed and believe that the matters stated in the
document are true' and correct and on that ground allege that the
matters stated therein are true and correct.
I declare under penalty of perjury that the foregoing
is true and correct, and that this Verification is executed this
day of November, 1995 at Los Angeles, Califor ia.
Gary L. 7m
146654.1
8
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RECEIVED
BEFORE THE BOARD OF SUPERVI OR DEC 41995
COUNTY OF CONTRA COSTA CLERK 8 pF SUPERVISORS
CONTRA COSTA CO.
In regard to Ad Valorem ) VERIFIED CLAIM FOR REFUND
Property Taxes paid by SFPP, )
L.P. , formerly known as )
SOUTHERN PACIFIC PIPE LINES ) Tax Bill No. :
PARTNERSHIP, L.P. - on State )
Assessed Unitary Property with) Letters 10/10/91 & 2/21/92
respect to assessment year )
1991 )
I.
AMOUNT OF CLAIM
SFPP, .L.P. , formerly known as SOUTHERN PACIFIC PIPE
LINES PARTNERSHIP, L.P. ("Claimant") pursuant to California
Revenue and Taxation Code Sections 5096, 5097 and 5097. 02 submits
this claim for refund of ad valorem property taxes on Claimant's
state assessed unitary property for assessment year 1991 paid on
property, valued as of the lien date January 1, 1991,.
Claimant owns and operates a refined petroleum products
intercounty pipeline system within the State of California and
five other western states which is assessed on a unitary basis by
the State Board of Equalization ("the Board") pursuant to Article
XIII, Section 19, of the California Constitution, the applicable
provisions of the California Revenue and Taxation Code, and Rules
of the Board. For assessment year 1991, the Board also assessed
on a unitary basis Claimantfs lands and rights of way. . The Board
had no jurisdiction to assess Claimant's lands and rights of way.
The total assessed value originally determined by the Board,
1
m ,
r.
including both Claimant's pipeline property over which the Board
had jurisdiction, and Claimant's lands and rights of way, .over
which the Board had no jurisdiction, was $560,000, 000. (This
assessed value was later reduced to $538,000,000 by the Board. )
A portion of the "total assessment so determined by the
Board was allocated to this county pursuant to the California
Revenue and Taxation Code sections 745, 755, and 756. Thereafter
Claimant paid ad valorem property taxes on such portion of such
assessment to this county. The 1991 assessment determined by the
Board of Claimant's state assessed unitary property is void in
part, to the extent that it included assessment of Claimant's
lands and rights-of-way, over which the Board had no
jurisdiction. The portion of the Board's assessment allocated to
this county is void in part, for the same reason. Additionally,
the 1991 assessment is void, in part, to the extent that it
included an assessment of Claimant's leaseholds and easements
which are tax-exempt, as the privately-owned lands subject to
these leaseholds and easements are taxed at full value to their
owners. . The taxes paid were erroneously or illegally collected,
or in the alternative illegally assessed or levied, to the extent
that they were levied or collected on the assessed value of
Claimant's lands and rights-of-way over which the Board had no
jurisdiction, and (as to leaseholds and easements) which were
tax-exempt.
The portion of the -assessment allocated to this county
on Claimant's lands and rights of way. which is void and the
2
amount of taxes paid by Claimant to this county on the purported
assessed value of Claimant's lands and rights of way for which
refund is sought is set forth in attached Exhibit A, which is
incorporated by reference as part of this Claim for Refund.
II. "
GROUNDS ON WHICH THE CLAIM IS FOUNDED
The ground on which the claim for refund of tax is
based are: (a) the taxes were erroneously or illegally
collected; and/or (b) the taxes were illegally assessed or
levied. The" taxes were erroneously or illegally collected, or
illegally assessed or levied, because the -Board's assessment
included an assessment of Claimant's lands and rights of way over
which the Board had no jurisdiction under Article XIII,
Section 19 of the California Constitution, the applicable
provisions of the California Revenue and Taxation Code, and
controlling judicial authority.
A. Statement of Facts.
Claimant is a Delaware limited partnership formed in
1988 to own and operate the refined petroleum products pipeline
system of Santa Fe Pacific Corporation. Claimant is publicly
traded, with 56 percent of its ownership in public hands.
Claimant was formerly known as Southern Pacific Pipelines
Partnership, L.P. (The name only has been changed; the entity is
the same. ) The pipeline system was previously owned by two
indirect wholly-owned subsidiaries of Santa Fe Pacific
3
Corporation: Southern Pacific Pipelines, Inc. and San Diego
Pipeline Company.
Claimant, a common carrier, is subject to regulation by
the California Public Utilities Commission (the "CPUC") with
respect to intrastate shipments through its pipeline system and
the Federal Energy Regulatory Commission (the "FERC") with
respect to interstate shipments through its pipeline system.
Claimant's pipeline system is located principally on leased
rights of way or other leased property. The rights-of-way in
which much of the pipeline system is located are already taxed at
fair market value.
B. Elements of the Assessment Contested.
Claimant does not challenge the assessed values derived
from the Board's application of its property assessment methods
to Claimant's various properties. The Board's assessment is
illegal, erroneous and void because the Board improperly included
in its assessment certain property of Claimant over which the
Board lacks jurisdiction under the California Constitution, the
applicable provisions of the Revenue and Taxation Code, and
controlling judicial authority. In particular, the Board
assessed the lands and rights of way of Claimant notwithstanding,
the fact that Article XIII, Section 19 of the California
Constitution does not extend to the assessment of such properties
and Revenue and Taxation Code section 721 only -confers upon the
Board jurisdiction to assess .property "that is to. be assessed by
it pursuant to Section 19 of Article XIII of the Constitution. "
4
Instead, Claimant's lands and rights-of-way' can only be legally
the subject of local assessment, if at all. The Board's
assessment-of this property therefore violated California
Constitution Article XIII, Section 19, and Revenue and Taxation
Code section 721.
C. Legal Background.
In General Pipeline Co. v. Board of Equalization, 5
Cal. 2d 253 . (1936) ("General Pipeline") , the California Supreme
Court defined "pipeline" under then Article. XIII, Section .14 of
the California Constitution, the predecessor of Article XIII,
-Section 19. The Court excluded lands and: rights of way from 'its
definition. ,Moreover, immediately after General Pipeline was
decided, the Board properly deleted from its reporting
instructions the reporting requirement for lands and rights of
way. The Board continued its administrative practice of not
assessing lands and rights of way every year for .48 years, before
improperly resuming its assessment of. lands and rights of way.
Exclusion of lands and rights of way from the constitutional
definition of "pipeline" is therefore mandated not only by
General Pipeline, but also by the Board's many years: of
administrative practice of excluding lands and rights of way from
the definition.
In Southern Pacific Pipe Lines. Inc. v. State Board of
Equalization, 14 Cal. App. 4th 42 (1993) ("Southern Pacific") ,
the Court of Appeal reaffirmed that as a matter of law lands and
rights-of-way are not included within the definition of
5
"pipeline" in California Constitution Article XIII, Section 19.
The Court of Appeal. construed. the decision in General Pipeline
"as barring the SBE from assessing the lands and rights-of-way of
private, intercounty oil pipelines. " (14 Cal. App. 4th at 53) .
Moreover, to the extent that the Board included in its
assessment leaseholds, easements, and other interests in
privately-owned land less than fee interests, the assessment of
these interests created illegal double taxation. As to leasehold
estates, the owner of the fee is deemed to be the owner of the
whole estate for the purposes of taxation. Graciosa Oil Co. v.
County of Santa Barbara, . 155. Ca1. .140 (1909) . The land subject
to these leaseholds and easements is taxed at full value to its
owners. The value of the ownership interest includes the value
of all lesser interests, which are accordingly. tax-exempt. Other
owners of leaseholds and easements are not assessed on the value
of these interests. This discriminatory assessment was in
violation of Claimant's rights of due process and. equal
protection under Article I, Section 7 of the California
Constitution and Amendment XIV, Section 1 of the United States
Constitution.
III.
OTICE.
Any notice, communication or inquiry regarding this
claim should be sent to: Mr. Jerry W. Jones, Director, Taxes and
Administration, SFPP, L.P. , 888 So. Figueroa St. , 2d Floor, Los
Angeles, California 90017..
6
IV.
PRAYER FOR RELIEF
THEREFORE, it is respectfully requested that this Board
of Supervisors issue an order directing the appropriate officials
to refund to Claimant no less than the amount described in the
preceding Section 1 and set forth on Exhibit A hereto, or such
other amounts as may be determined to be lawfully refundable,
plus interest thereon .allowed by law.
Dated: November ? 1995, at Los Angeles,
California.
=SFPP, -L.P. ,- a Delaware Limited
Partnership,
By its General Partner SANTA FE
PACIFIC PIPELINES, I
By
Gary L.i im
Assists Treasurer
Of counsel:
Robert L. Dunn, Esq.
Peter W. Michaels, Esq.
Cooper, White & Cooper
201 California Street, 17th Floor
San Francisco, CA 94111
(415/433-1900)
7
VERIFICATION
I am Assistant Treasurer of SANTA FE PACIFIC PIPELINES,
INC. , general partner of SFPP, . L.P. a Delaware Limited
Partnership, and am authorized to make. this verification for and
on behalf of SFPP, L.P. I have read the annexed Claim For Refund
of SFPP, L.P. Based on such .information as is available to SFPP,
L.P. , I am informed and believe that the matters stated in the
document are true and correct and on that ground allege that the
matters stated therein are true and correct.
I declare under penalty of perjury that the foregoing
is true -and correct, and that this Verification is executed this
day of November, 1995 at Los Angeles, Califor ia.
Gary L. im
146654.1
8