IN THE MATTER OF THE APPEALS OF VARIOUS APPLICANTS (SEE EXHIBIT "A") FROM AN ORDER OF THE DIRECTOR OF PROPERTY VALUATION FOR THE YEARS 2004 AND 2005 AND IN THE MATTER OF THE APPLICATIONS OF VARIOUS APPLICANTS (SEE EXHIBIT "A") FOR EXEMPTION FROM PROPERTY TAXATION
ORDER NUNC PRO TUNC
The Board hereby issues this Order Nunc Pro Tunc for the purpose of substituting the correct parties and docket numbers in this consolidated appeal for the incomplete list of parties and docket numbers set forth in the caption of the original Order certified June 21, 2006. The corrected parties and docket numbers are set forth in Exhibit "A", which is attached hereto and incorporated herein by this reference. This Order Nunc Pro Tunc shall supersede the June 21, 2006 Order in all respects.
These matters come on for consideration and decision by the Board of Tax Appeals of the State of Kansas. After considering the evidence and premises of the parties, the Board finds and concludes as follows.
The Board has jurisdiction of the subject matter and of the parties, as timely appeals and tax exemption applications were filed pursuant to K.S.A. 74-2438 and K.S.A. 79-213, respectively. These matters were consolidated for hearing and adjudication pursuant to a joint motion of the parties. A hearing was held on July 25, 2005.
Appearing on behalf of the Taxpayers-Applicants (hereinafter "Taxpayers") were Michael Lennen, Janet H. Ward, and Robert Coykendall. Appearing on behalf of the State of Kansas, Division of Property Valuation (hereinafter "PVD") was Bill Waters, Attorney.
The joint stipulations of fact submitted by the Taxpayers and PVD are hereby adopted in their entirety. Following is a summary of the pertinent facts upon which the Board bases its decision herein.
1. These matters are appeals of Department of Revenue, Property Valuation Division ("PVD") final notices of valuation and ad valorem tax exemption applications of forty-four Taxpayers for tax years 2004 and 2005 involving stored natural gas in underground formations in Meade County, Kansas.
2. Taxpayers are not certificated or regulated as natural gas public utilities by the Kansas Corporation Commission ("KCC"); nor do they engage in those activities specified in K.S.A. 79-5a01(a)(1) through (7).
3. None of the Taxpayers "control, manage or operate a business of transporting or distributing to, from, through or in this state natural gas, oil, or other commodities in pipes or pipelines or engage primarily in the business of storing natural gas in an underground formation. The Taxpayers are not authorized to exercise the power of eminent domain in Kansas.
4. The Taxpayers do not own facilities in Kansas for the transmission, distribution or storage of natural gas.
5. The Taxpayers purchase natural gas from various producers and marketers and deliver the gas to one or more interstate natural gas pipelines/common carriers for storage or deferred delivery.
6. The interstate pipelines having storage facilities in Kansas and other states are: Panhandle Eastern Pipe Line Company ("Panhandle Eastern"); Colorado Interstate Gas Company ("CIG"), Northern Natural Gas Company ("Northern"), and Southern Star Central Gas Pipeline ("Southern Star") (collectively, the "Interstate Pipelines").
7. The interstate pipelines are regulated by the Federal Energy Regulatory Commission ("FERC"). Natural gas storage and deferred delivery services furnished by the interstate pipelines are provided in accordance with and subject to FERC approved tariffs.
8. Relevant provisions of the FERC approved tariffs contain specific provisions regarding control and possession of natural gas delivered to the interstate pipelines for storage or deferred delivery. Each of the FERC tariffs includes provisions placing the risk of loss, liability and damages on the interstate ...