II 

109TH CONGRESS 

1ST SESSION S. 1201 

To prevent certain discriminatory taxation of natural gas pipeline property. 

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 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. LIMITATION ON DISCRIMINATORY TAXATION 

4 OF NATURAL GAS PIPELINE PROPERTY. 

5 (a) DEFINITIONS.—As used in this Act, the following 

6 definitions apply: 

7 (1) ASSESSMENT.—The term ‘‘assessment’’ 

8 means valuation for a property tax levied by a taxing 

9 authority. 

10 (2) ASSESSMENT JURISDICTION.—The term 

11 ‘‘assessment jurisdiction’’ means a geographical area 
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1 used in determining the assessed value of property 

2 for ad valorem taxation. 

3 (3) COMMERCIAL AND INDUSTRIAL PROP4 ERTY.—The term ‘‘commercial and industrial prop5 erty’’ means property (excluding natural gas pipeline 

6 property, public utility property, and land used pri7 marily for agricultural purposes or timber growth) 

8 devoted to commercial or industrial use and subject 

9 to a property tax levy. 

10 (4) NATURAL GAS PIPELINE PROPERTY.—The 

11 term ‘‘natural gas pipeline property’’ means all 

12 property, real, personal, and intangible, owned or 

13 used by a natural gas pipeline providing transpor14 tation or storage of natural gas subject to the juris15 diction of the Federal Energy Regulatory Commis16 sion. 

17 (5) PUBLIC UTILITY PROPERTY.—The term 

18 ‘‘public utility property’’ means property (excluding 

19 natural gas pipeline property) that is devoted to 

20 public service and is owned or used by any entity 

21 that performs a public service and is regulated by 

22 any governmental agency. 
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1 SEC. 2. DISCRIMINATORY ACTS. 

2 (a) IN GENERAL.—The acts specified in subsection 

3 (b) unreasonably burden and discriminate against inter4 state commerce. 

5 (b) DISCRIMINATORY ACTS.—A State, subdivision of 

6 a State, authority acting for a State or subdivision of a 

7 State, or any other taxing authority (including a taxing 

8 jurisdiction and a taxing district) may not do any of the 

9 following: 

10 (1) ASSESSMENTS.—Assess natural gas pipeline 

11 property at a value that has a higher ratio to the 

12 true market value of the natural gas pipeline prop13 erty than the ratio that the assessed value of com14 mercial and industrial property in the same assess15 ment jurisdiction has to the true market value of 

16 such commercial and industrial property. 

17 (2) ASSESSMENT TAXES.—Levy or collect a tax 

18 on an assessment that may not be made under para19 graph (1). 

20 (3) AD VALOREM TAXES.—Levy or collect an ad 

21 valorem property tax on natural gas pipeline prop22 erty at a tax rate that exceeds the tax rate applica23 ble to commercial and industrial property in the 

24 same assessment jurisdiction. 

25 (4) OTHER TAXES.—Impose any other tax that 

26 discriminates against a natural gas pipeline pro-
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1 viding transportation or storage of natural gas sub2 ject to the jurisdiction of the Federal Energy Regu3 latory Commission. 

4 SEC. 3. JURISDICTION OF COURTS; RELIEF. 

5 (a) GRANT OF JURISDICTION.—Notwithstanding sec6 tion 1341 of title 28, United States Code, and notions of 

7 comity, and without regard to the amount in controversy 

8 or citizenship of the parties, a district court of the United 

9 States shall have jurisdiction, concurrent with other juris10 diction of the courts of the United States, of States, and 

11 of all other taxing authorities and taxing jurisdictions, to 

12 prevent a violation of this Act. 

13 (b) RELIEF IN GENERAL.—Except as provided in 

14 subsection (c), relief may be granted under this Act only 

15 if the ratio of assessed value to true market value of nat16 ural gas pipeline property exceeds by at least 5 percent 

17 the ratio of assessed value to true market value of other 

18 commercial and industrial property in the same assess19 ment jurisdiction. 

20 (c) OTHER RELIEF.—If the ratio of the assessed 

21 value of other commercial and industrial property in the 

22 assessment jurisdiction to the true market value of all 

23 other commercial and industrial property cannot be deter24 mined to the satisfaction of the court through the random25 sampling method known as a sales assessment ratio study 
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1 (to be carried out under statistical principles applicable 

2 to such a study), each of the following shall be a violation 

3 of this Act for which relief under this Act may be granted: 

4 (1) ASSESSMENTS.—An assessment of the nat5 ural gas pipeline property at a value that has a high6 er ratio of assessed value to the true market value 

7 of the natural gas pipeline property than the ratio 

8 of the assessed value of all other property (excluding 

9 public utility property) subject to a property tax levy 

10 in the assessment jurisdiction has to the true market 

11 value of all other property (excluding public utility 

12 property). 

13 (2) AD VALOREM TAXES.—The collection of an 

14 ad valorem property tax on the natural gas pipeline 

15 property at a tax rate that exceeds the tax rate ap16 plicable to all other taxable property (excluding pub17 lic utility property) in the taxing jurisdiction.

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