STATE TAX COMMISSION OF MISSOURI

UNION ELECTRIC COMPANY	)
d/b/a Ameren Missouri	)
Complainant,	)
	)	Appeal No.	17-41500
v.	)		18-41500
	)
MELISSA MAUPIN, ASSESSOR,	)
AUDRAIN COUNTY, MISSOURI,	)
Respondent.	)

DECISION AND ORDER

HOLDING

The decision of the Audrain County Board of Equalization (BOE) is SET ASIDE. Union Electric Company (Complainant) presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish that the subject property is subject to the State Tax Commission’s (STC) exclusive authority of original assessment as the distributable property of electric power and light companies and electric transmission lines pursuant to Section 138.420[1]. Distributable property includes towers and communication equipment used for generation and distribution of power. Section 153.034.

ISSUE

Complainant filed its appeal on the ground that the property was used for the generation and distribution of electricity and, therefore, should be valued by the STC. [2]

A prehearing conference was conducted. The parties stipulated that the sole issue in these appeals is whether the Respondent has authority to assess the subject property or whether it must be assessed centrally and exclusively by the STC. The parties entered into a stipulation of facts submitted to the STC on December 10, 2019. Complainant submitted a Motion for Summary Judgment on December 16, 2019. Respondent filed a reply on January 14, 2020. Complainant replied on January 29, 2020.

The Hearing Officer took the matter under advisement.[3]

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1. Authority. Authority over this appeal is proper. Complainant timely appealed to the STC from the decision of the BOE.
2. The Subject Property. The subject property is a 299-foot tall microwave communication tower and associated land located in Audrain County, Missouri, owned by Complainant. It is identified by Parcel/Locator No. 14-3-08-0-000-008. Complainant operates an electric utility system and a natural gas system. Sixteen active and inactive antennas are situated on the tower. Complainant owns a total of eight antennas on the tower. Complainant’s “push to talk radio system” antenna is located at 279 feet. The “push to talk” is used by crews to support electric distribution for outage restoration, daily work, electric line switching, and other operational duties. Complainant’s “multiple address radio system” antennas are located at the 275-foot level. The system is used for the communication and control of distribution electric transmission substation remote terminal units, electric line switches, and communications to weather stations.

The antennas belonging to Complainant, other than those previously described, are used as pass-through repeater stations. The repeater stations enhance the communication system. They provide applications for the transmission level substations remote terminal units, transmission line relay communications, push to talk radio system communications, multiple address system ratio system master site communication, and network connectivity.

The United States Federal Bureau of Investigation owns and uses the antenna at the 244-foot level. The antenna is exempt from ad valorem taxation. The Missouri State Highway Patrol owns and uses an antenna at the 175-foot level and one antenna at the 155-foot level. The antennas are exempt from ad valorem taxation. AT&T owns five antennas. Three antennas are active and two are inactive. The antennas are used for telephone service.

3. Assessment. Respondent determined the property’s true value in money was $36,215, with the land having a value of $1,935 and the tower having a value of $34,280. The Board of Equalization issued a decision on July 17, 2017, “TO LEAVE THE PROPERTY ON THE SCHEDULE 15-OP: REAL OPERATING PROPERTY.”

4. Evidence. The parties filed their Stipulation of facts along with Attachments describing the nature, ownership, purpose, and use of the subject property. The Attachments included photographs of the subject property. Complainant also filed the Affidavit of Brian A. Hartman, Senior Manager of Network Engineering for Complainant, and the Affidavit of Joseph J. LaMacchia, Senior Tax Specialist at Ameren Services Company, to support Complainant’s argument that the subject property should be assessed by the STC.

5. Presumption of Correct Assessment Rebutted. The evidence was substantial and persuasive to rebut the presumption of correct assessment by the BOE and to establish that the property is used for the distribution of electricity and should be assessed centrally and exclusively by the STC.

 

CONCLUSIONS OF LAW AND DECISION

Authority

The STC has authority to hear this appeal and to correct any assessment that is shown to be unlawful, unfair, arbitrary or capricious. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431.

Investigation by Hearing Officer

In order to investigate appeals filed with the STC, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.

Issuance of Decision Absent Evidentiary Hearing

The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of the BOE, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious. Section 138.431.5. The parties participated in a prehearing conference and agreed to submit the appeal on stipulated facts. Complainant still has the burden to present substantial and persuasive evidence.

Evidentiary Standards

The hearing officer is the trier of fact and determines the credibility and weight of the evidence. Citizens for Rural Pres., Inc. v. Robinett, 648 S.W.2d 117, 132 (Mo. App. 1982); see also Exch. Bank of Mo. v. Gerlt, 367 S.W.3d 132, 136 (Mo. App. 2012) (the trier of fact determines credibility and is free to disbelieve all or part of a party’s evidence). The hearing officer is not bound by any single formula, rule or method in determining true value in money, and “is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled to.” St. Louis Cty. v. State Tax Comm’n, 515 S.W.2d 446, 450 (Mo. 1974); see also Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. 2015) (the relative weight of any relevant factor is for the administrative hearing officer to decide). “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).

Complainant’s Burden of Proof

There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” Westwood Partnership, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).

Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W. 2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v General Motors Assembly Division, 527 S.W. 2d 50, 53 (Mo. App. 1975).

Original Assessment

Missouri statutes classify the property of railroads and utilities as local or distributable for purposes of taxation.  State ex rel. Hatten v. Kansas City Power & Light Co., 365 Mo. 296, 281 S.W.2d 784, 786 (1955). The STC has the exclusive power of assessment of distributable property. Section 138.420. “Distributable property” includes real and personal property used in the generation and distribution of electric power. Distributable property includes towers and communication equipment used for control of generation and distribution of power as well as the land associated with distributable equipment. Distributable property also includes boiler plant equipment, turbogenerator units, generators, station equipment, towers, fixtures, poles, conductors, conduit transformers, services, meters, substation equipment, rights-of-way, reactor, reactor plant equipment, and cooling towers. Section 153.034.1

“Local property” includes real and personal property used by the electric company not used directly in the generation and distribution of power. Such property includes motor vehicles, construction work in progress, materials and supplies, office furniture, office equipment, coal piles, nuclear fuel, warehouses, office buildings, generating plant structures, dams, waterways, and communication equipment not used for control of generation and distribution of power. Section 153.034.2

“Local property” is assessed by the county and taxed on the individual levy of a school district while “distributable property” is assessed by the STC and taxed according to the average rates of all school districts within the county.  Southwestern Bell Telephone Co. v. Bond, 595 S.W.2d 365, 367 (Mo.App.1980).

Power plants generate electricity that is delivered to customers through transmission and distribution power lines. Technologies for measurements, communications, and controls support the real-time coordination of thousands of generators, power flows across interconnected transmission lines, and delivery of electricity to customers by means of an extensive distribution network. Communications infrastructure is an essential component of grid control systems because it provides the critical data-link for feedback and status updates from distant sensors and also carries command signals to controllable assets in the field. Communications equipment maintains reliable connectivity under both normal and degraded system operating conditions (e.g., electrical noise, equipment failure, and physical attacks).

Discussion

The issue before the STC is whether the subject property should be locally assessed or centrally assessed. The subject property holds antennas used by Complainant in the distribution of electricity as well as antennas used for other purposes. Section 153.034 provides that towers are distributable property. The statute also provides that communication equipment used for control of generation and distribution of power is distributable property. To be defined as “distributable property,” the statute does not require the tower to be used exclusively for generation and distribution of electric power; rather, the statute requires the tower to be used “directly in the generation and distribution of electric power.” Id. If the tower is held for purposes other than generation and distribution of electricity, it is not defined as “distributable property.” Id.

The subject property is a tower and associated land. The undisputed facts established that the tower and the antennas belonging to Complainant attached to the tower are used to support Complainant’s electric service to its electric utility customers and are used directly in the generation and distribution of electric power. According to the Affidavit of Brian A. Hartman, Senior Manager of Network Engineering, the tower is used “to support its electric service to its electric utility customers and is used directly in the generation of distribution of electric power.” (Affidavit, para. 9) Specifically, Complainant’s antennas are used to support outage restoration; electric line switching; for the communication and control of the distribution electric transmission substation remote terminal units; electric line switches; gas RTUs; communications to weather stations; signal amplification; and communications and connectivity. According to the Affidavit of Joseph J. LaMacchia, Senior Tax Specialist at Ameren Services Company, Complainant owns other towers in other counties in Missouri, which are used for the same purposes as the subject property. (LaMacchia Affidavit, para. 4-5) All of the other towers are centrally assessed by the STC. (LaMacchia Affidavit, para. 6)

CONCLUSION AND ORDER

            The evidence was substantial and persuasive to establish that the subject property is subject to the exclusive power of original assessment as the distributable property of electric power and light companies and electric transmission lines pursuant to Section 138.420. The decision of the BOE is SET ASIDE.

Application for Review

            A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov, and a copy of said application must be sent to each person listed below in the certificate of service.

            Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.

Disputed Taxes

            The Collector of Audrain County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED this 31^st day of July, 2020.

STATE TAX COMMISSION OF MISSOURI

Maureen Monaghan[4]

Hearing Officer

 

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 31st day of July, 2020, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

 

 

Elaina McKee

Legal Coordinator

 

 

[1] All statutory citations are to RSMo 2016.

[2] The facts and issue before the Commission in 2018 are identical to the facts and issue in 2017; accordingly, the appeals were consolidated.

[3] Complainant appeared by counsel Timothy Tryniecki. Respondent appeared by counsel Ivan Schraeder. The appeal was decided by Chief Counsel Maureen Monaghan (Hearing Officer).

[4] Due to the COVID-19 pandemic and related stay-at-home orders and State office closures, the issuance of some decisions and orders of hearing officers have been delayed. This matter was heard and decided by the Hearing Officer prior to her retirement from service with the STC, which occurred during the stay-at-home orders and State office closures.