II 109th CONGRESS 1st Session S. 1201 IN THE SENATE OF THE UNITED STATES June 8, 2005 Mr. Cornyn introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To prevent certain discriminatory taxation of natural gas pipeline property.

1.

Limitation on discriminatory taxation of natural gas pipeline property

(a)

Definitions

As used in this Act, the following definitions apply: (1)

Assessment

The term assessment means valuation for a property tax levied by a taxing authority. (2)

Assessment jurisdiction

The term assessment jurisdiction means a geographical area used in determining the assessed value of property for ad valorem taxation. (3)

Commercial and industrial property

The term commercial and industrial property means property (excluding natural gas pipeline property, public utility property, and land used primarily for agricultural purposes or timber growth) devoted to commercial or industrial use and subject to a property tax levy. (4)

Natural gas pipeline property

The term natural gas pipeline property means all property, real, personal, and intangible, owned or used by a natural gas pipeline providing transportation or storage of natural gas subject to the jurisdiction of the Federal Energy Regulatory Commission. (5)

Public utility property

The term public utility property means property (excluding natural gas pipeline property) that is devoted to public service and is owned or used by any entity that performs a public service and is regulated by any governmental agency.

2.

Discriminatory acts

(a)

In general

The acts specified in subsection (b) unreasonably burden and discriminate against interstate commerce. (b)

Discriminatory acts

A State, subdivision of a State, authority acting for a State or subdivision of a State, or any other taxing authority (including a taxing jurisdiction and a taxing district) may not do any of the following: (1)

Assessments

Assess natural gas pipeline property at a value that has a higher ratio to the true market value of the natural gas pipeline property than the ratio that the assessed value of commercial and industrial property in the same assessment jurisdiction has to the true market value of such commercial and industrial property. (2)

Assessment taxes

Levy or collect a tax on an assessment that may not be made under paragraph (1). (3)

Ad valorem taxes

Levy or collect an ad valorem property tax on natural gas pipeline property at a tax rate that exceeds the tax rate applicable to commercial and industrial property in the same assessment jurisdiction. (4)

Other taxes

Impose any other tax that discriminates against a natural gas pipeline providing transportation or storage of natural gas subject to the jurisdiction of the Federal Energy Regulatory Commission.

3.

Jurisdiction of courts; relief

(a)

Grant of jurisdiction

Notwithstanding section 1341 of title 28, United States Code, and notions of comity, and without regard to the amount in controversy or citizenship of the parties, a district court of the United States shall have jurisdiction, concurrent with other jurisdiction of the courts of the United States, of States, and of all other taxing authorities and taxing jurisdictions, to prevent a violation of this Act. (b)

Relief in general

Except as provided in subsection (c), relief may be granted under this Act only if the ratio of assessed value to true market value of natural gas pipeline property exceeds by at least 5 percent the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction. (c)

Other relief

If the ratio of the assessed value of other commercial and industrial property in the assessment jurisdiction to the true market value of all other commercial and industrial property cannot be determined to the satisfaction of the court through the random-sampling method known as a sales assessment ratio study (to be carried out under statistical principles applicable to such a study), each of the following shall be a violation of this Act for which relief under this Act may be granted: (1)

Assessments

An assessment of the natural gas pipeline property at a value that has a higher ratio of assessed value to the true market value of the natural gas pipeline property than the ratio of the assessed value of all other property (excluding public utility property) subject to a property tax levy in the assessment jurisdiction has to the true market value of all other property (excluding public utility property). (2)

Ad valorem taxes

The collection of an ad valorem property tax on the natural gas pipeline property at a tax rate that exceeds the tax rate applicable to all other taxable property (excluding public utility property) in the taxing jurisdiction.