Clyde A. "Rock" Gisclair, Assessor for St. Charles Parish VS The Louisiana Tax Commission (Re: August 12, 2008 Decision from Commission Docket No. 06-PS-002)
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NO 2010 CA 0272 CLYDE A ROCK GISCLAIR ASSESSOR FOR ST CHARLES PARISH VERSUS THE LOUISIANA TAX COMMISSION RE AUGUST 12 2008 DECISION IN COMMISSION DOCKET Judgment Rendered May 7 2010 On Appeal from the 19th Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana Trial Court No 570 485 The Honorable Wilson Fields Judge Presiding William W Edelman Metairie LA Attorney for Plaintiff Appellant Clyde A Gisclair Assessor for St Charles Parish Robert D Hoffman Jr Attorney for Defendant Appellee Covington LA The Louisiana Tax Commission BEFORE CARTER C GUIDRY AND PETTIGREW JJ J C a cr r i2 yY jjla CARTER C J Clyde A Rock Gisclair assessor for St Charles Parish appeals a decision of the district court that affirmed the August 12 2008 decision of the Louisiana Tax Commission LTC which concerns the LTC 2006 s tax assessment and valuation of the public service properties of Entergy Louisiana Inc For the following reasons we affirm FACTS AND PROCEDURAL HISTORY This appeal arises in the ongoing litigation between Gisclair and the LTC concerning the LTC determinations as to the fair market value and s taxable value of Entergy properties s For a complete background of this matter see Gisclair v Louisiana Tax Commission 081616 La App 1 Cir 10 unpublished reversed 09 0007 090008 La 6 16 08 31 09 26 So3d 1132 Gisclair I and Gisclair v Louisiana Tax Commission 09 2047 La App 1 Cir 2 unpublished Gisclair II It is clear from 10 12 the prior opinions in this litigation that Gisclair has raised substantially the same arguments as to the LTC methods of valuing Entergy s spublic service properties for multiple tax years This appeal concerns Gisclair sclaims as to the correctness of the valuation for the 2006 tax year The LTC centrally valued and assessed all of Entergy properties for s the 2006 tax year and determined the assessed valuation to be 00 000 150 2The LTC then allocated that value among the parishes in which the properties are located Since 46 of the company property is s located in St Charles Parish the total assessed value to St Charles Parish Neither Gisclair I nor Gisclair II decided the merits of Gisclair challenges s Rather both Gisclair I and II focused on jurisdictional aspects to Gisclair schallenges 2 was 191 Entergy did not contest the valuation and paid its 00 280 674 2006 ad valorem taxes without protest Gisclair challenged the 2006 assessment utilizing LTC Rule 2907 which allowed assessors to file exceptions to the assessed value of a company After discovery was conducted the LTC held a hearing then considered Gisclair claims at an open meeting The LTC denied Gisclair s s exceptions and upheld the determination of Entergy assessed value s Thereafter Gisclair filed a Petition Appeal in the 19th Judicial District Court wherein he sought judicial review of the LTC decision as provided s for in the Administrative Procedure Act affirmed the LTC decision s APA The district court Gisclair now seeks appellate review by this court STANDARD OF REVIEW The Louisiana Administrative Procedure Act APA at LSAR S 964G 49 governs the judicial review of a final decision in an agency adjudication providing that G The court may affirm the decision of the agency or remand the case for further proceedings The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings inferences conclusions or decisions are 2 Before its repeal in March of 2007 LTC Rule 2907 provided A On or before September 15 or within 15 days after the commission has certified the assessed value of a company to an assessor whichever is later an assessor may file an exception to the assessed value of the company or to the allocation of the assessed value to one or more parishes in writing with the commission together with evidence in support of the exception If in the exception a hearing is requested it shall be held in accordance with the administrative procedure act B Notwithstanding the fact that an exception has been filed to the valuation or allocation of public service property the assessment shall be entered on the rolls as it was originally reported to the assessor until or unless a change order is issued by the commission 3 1 In violation of constitutional or statutory provisions 2 In excess of the statutory authority of the agency 3 Made upon unlawful procedure 4 Affected by other error of law 5 Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion or 6 Not supported and sustainable by a preponderance of the evidence as determined by the reviewing court In the application of this rule the court shall make its own determination and conclusions of fact by a preponderance of evidence based upon its own evaluation of the record reviewed in its entirety upon judicial review Where the agency has the opportunity to judge the credibility of witnesses by firsthand observation of demeanor on the witness stand and the reviewing court does not due regard shall be given to the agency s determination of credibility issues The manifest error test is used in reviewing the facts as found by the administrative tribunal the arbitrary and capricious test is used in reviewing the administrative tribunal conclusions and its exercise of discretion Save s Ourselves Inc v La Environmental Control Commission 452 So 2d 1152 1159 La 1984 On legal issues the reviewing court gives no special weight to the findings of the administrative tribunal but conducts a de novo review of questions of law and renders judgment on the record Eicher v Louisiana State Police 970121 La App 1 Cir 2 710 So 799 98 20 2d 803 writ denied 98 0780 La 5719 So 51 98 8 2d Any one of the six bases listed in the statute is sufficient to modify or reverse an agency determination Wild v State Dept of Health and Hospitals 08 1056 La App 1 Cir 12 7 So 1 4 08 23 3d The APA further specifies that judicial review shall be conducted by the court without a jury and shall be confined to the record LSAR 49 S 964F 4 When reviewing an administrative final decision the district court functions as an appellate court Once a final judgment is rendered by the district court an aggrieved party may seek review by appeal to the appropriate appellate court On review of the district court judgment no s deference is owed by the court of appeal to the factual findings or legal conclusions of the district court just as no deference is owed by the Louisiana Supreme Court to factual findings or legal conclusions of the court of appeal Maraist v Alton Ochsner Medical Foundation 022677 La App 1 Cir 5 879 So 815 817 Consequently this court will 04 26 2d conduct its own independent review of the record in accordance with the standards provided in LSAR 49 S 964G DISCUSSION At issue in this appeal is the valuation of Entergy public service s properties Louisiana Constitution Article VII 18D mandates that the LTC value public service properties at fair market value To accomplish the valuation the LTC performs a unit valuation meaning that the LTC values the entire property of the taxpayer as a unit then apportions the value among the affected parishes Louisiana Revised Statute 47 specifies 1853 the means of conducting the valuation providing in pertinent part B 1 In appraising public service properties the Louisiana Tax Commission shall a Employ all of the following nationally recognized techniques of appraisal where applicable to best determine fair market value 3 Entergy is not a party to these proceedings This court has the discretion to recognize the failure to join a party needed for just adjudication LSA C arts 641 P 645 We feel that Entergy should have been made a party to these proceedings However because our review of the record in this matter convinces us that the LTC s decision is correct and should be affirmed and in the interest of judicial efficiency we decline to notice the failure to add Entergy as a party 5 iThe market approach ii The cost approach iii The income approach b Assign such weight to each approach as is appropriate to best determine fair market value 2 However all public service properties of the same nature and kind shall be appraised in the same manner The appraised value of all lands owned by the company in this state shall be deducted from the total appraised value of the public service properties and shall be assessed by the Louisiana Tax Commission and shown as a separate item on the tax roll In the recent case of Transcontinental Gas Pipeline Corp v LA Tax Commission 09 1998 091989 09 1990 091991 09 1992 La 10 16 3 3d So the supreme court examined in great detail the s LTC methodologies and procedures for arriving at a valuation for assessment of public service properties in that case interstate natural gas pipeline companies stating The interstate and intrastate companies that are assessed at 25 percent 25 of their fair market value public service properties are statutorily required to be assessed centrally by the Louisiana Tax Commission See La R 47 S 1853 The Louisiana Legislature saw fit to require that public service properties due to their nature as public service properties should be appraised according to a certain method by the LTC When appraising public service property the LTC utilizes a combination of all three ofthe nationally recognized techniques of appraisal as listed in La R 47 For pipelines the S 1853 B LTC has adopted the unit method in which the entire operating property is valued as a unit without functional or geographic division of the whole considering the income the property produces The record reflects that the method adopted by the LTC in valuing public service property is a method typically used in approximately 35 other states The benefit of such an operation is that an appraiser is viewing the entire operation considering all of the parts and not just individual contributions of some parts of the whole Using this approach an appraiser looks to the value of the business itself or the going concern of the company and not just the hard assets of the company The record also reflects that this method is a proper assessment method for rate regulated entities that 51 qualify as public service property which includes interstate companies and intrastate companies who sell to local distributing systems as it only makes sense to appraise the property in this manner because they report to and are rate regulated as an entire unit by the Federal Energy Regulatory Commission or the Louisiana Public Service Commission respectively Transcontinental Gas Pipeline Corp 3d So at Footnote omitted The supreme court further reasoned here T is some indication in the record that the cost approach utilized by the parish assessors regularly values property higher than property which has been valued on the unit method The overall implication from the record however is that typically the method currently used by the parish assessors to assess the fair market value of pipes within their parishes comes out higher than the method used by the LTC such that the plaintiffs tax burden could likely increase if they were treated like their claimed favored competitors the unregulated intrastate companies This may be an imperfect appraisal system as appraisal is an imperfect science to begin with but interstate commerce is simply not burdened if the interstate companies are actually paying less than they would if they were valued like their claimed favored intrastate competitors Transcontinental Gas Pipeline Corp 3d So at Footnote omitted and emphasis added We have reviewed the administrative record in this case in light of the standards set forth in LSAR 49 cited supra S 964 While Gisclair presented a reasonable alternative means of assessing and valuing public service properties public service property assessments are legislatively required to be appraised according to a certain method by the LTC Transcontinental Gas Pipeline Corp administrative record 3d So at We find that the reasonably supports the LTC written opinion s denying Gisclair exceptions to the appraisal of Entergy properties s s W Accordingly we find no basis for remand or reversal under LSA R S CONCLUSION For the foregoing reasons the judgment of the district court that affirmed the decision of the Louisiana Tax Commission is affirmed Costs of this appeal in the amount of 1 are assessed to Clyde A Gisclair 50 303 assessor for St Charles Parish AFFIRMED H
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