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Union Calendar No. 389 

109TH CONGRESS 

2D SESSION H. R. 1369 

[Report No. 109–656] 

To prevent certain discriminatory taxation of natural gas pipeline property. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2005 

Mr. CANNON (for himself, Mr. CARTER, Mr. SMITH of Texas, and Mr. 

GOHMERT) introduced the following bill; which was referred to the Committee on the Judiciary 

SEPTEMBER 14, 2006 

Additional sponsors: Mr. FORBES, Mr. BOUCHER, Mr. GENE GREEN of Texas, 

and Mr. GONZALEZ

SEPTEMBER 14, 2006 

Committed to the Committee of the Whole House on the State of the Union 

and ordered to be printed 

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, 


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1 SECTION 1. LIMITATION ON DISCRIMINATORY TAXATION 

2 OF NATURAL GAS PIPELINE PROPERTY. 

3 (a) DEFINITIONS.—For purposes of section: 

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

5 means valuation for a property tax levied by a taxing 

6 authority. 

7 (2) ASSESSMENT JURISDICTION.—The term 

8 ‘‘assessment jurisdiction’’ means a geographical area 

9 used in determining the assessed value of property 

10 for ad valorem taxation. 

11 (3) COMMERCIAL AND INDUSTRIAL PROP12 ERTY.—The term ‘‘commercial and industrial prop13 erty’’ means property (excluding natural gas pipeline 

14 property, public utility property, and land used pri15 marily for agricultural purposes or timber growth) 

16 devoted to commercial or industrial use and subject 

17 to a property tax levy. 

18 (4) NATURAL GAS PIPELINE PROPERTY.—The 

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

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

21 used by a natural gas pipeline providing transpor22 tation or storage of natural gas, subject to the juris23 diction of the Federal Energy Regulatory Commis24 sion. 

25 (5) PUBLIC UTILITY PROPERTY.—The term 

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


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1 natural gas pipeline property) that is devoted to 

2 public service and is owned or used by any entity 

3 that performs a public service and is regulated by 

4 any governmental agency. 

5 (b) DISCRIMINATORY ACTS.—The acts specified in 

6 this subsection unreasonably burden and discriminate 

7 against interstate commerce. A State, subdivision of a 

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

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

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

11 following such acts: 

12 (1) Assess natural gas pipeline property at a 

13 value that has a higher ratio to the true market 

14 value of the natural gas pipeline property than the 

15 ratio that the assessed value of other commercial 

16 and industrial property in the same assessment ju17 risdiction has to the true market value of the other 

18 commercial and industrial property. 

19 (2) Levy or collect a tax on an assessment that 

20 may not be made under paragraph (1). 

21 (3) Levy or collect an ad valorem property tax 

22 on natural gas pipeline property at a tax rate that 

23 exceeds the tax rate applicable to commercial and in24 dustrial property in the same assessment jurisdic25 tion. 


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1 (4) Impose any other tax that discriminates 

2 against a natural gas pipeline providing transpor3 tation subject to the jurisdiction of the Federal En4 ergy Regulatory Commission. 

5 SEC. 2. JURISDICTION OF COURTS; RELIEF. 

6 (a) GRANT OF JURISDICTION.—Notwithstanding sec7 tion 1341 of title 28, United States Code, and notions of 

8 comity, and without regard to the amount in controversy 

9 or citizenship of the parties, the district courts of the 

10 United States shall have jurisdiction, concurrent with 

11 other jurisdiction of the courts of the United States, of 

12 States, and of all other taxing authorities and taxing juris13 dictions, to prevent a violation of section 1. 

14 (b) RELIEF.— Except as otherwise provided in this 

15 subsection, relief may be granted under this Act only if 

16 the ratio of assessed value to true market value of natural 

17 gas pipeline property exceeds by at least 5 percent the 

18 ratio of assessed value to true market value of other com19 mercial and industrial property in the same assessment 

20 jurisdiction. If the ratio of the assessed value of other 

21 commercial and industrial property in the assessment ju22 risdiction to the true market value of all other commercial 

23 and industrial property cannot be determined to the satis24 faction of the court through the random-sampling method 

25 known as a sales assessment ratio study (to be carried 


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1 out under statistical principles applicable to such a study), 

2 each of the following shall be a violation of section 1 for 

3 which relief under this Act may be granted: 

4 (1) An assessment of the natural gas pipeline 

5 property at a value that has a higher ratio of as6 sessed value to the true market value of the natural 

7 gas pipeline property than the ratio of the assessed 

8 value of all other property (excluding public utility 

9 property) subject to a property tax levy in the as10 sessment jurisdiction has to the true market value of 

11 all other property (excluding public utility property). 

12 (2) The collection of an ad valorem property tax 

13 on the natural gas pipeline property at a tax rate 

14 that exceeds the tax rate applicable to all other tax15 able property (excluding public utility property) in 

16 the taxing jurisdiction. 


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Union Calendar No. 389 

109TH CONGRESS 

2D SESSION H. R. 1369 

[Report No. 109

–656] 

A BILL 

To prevent certain discriminatory taxation of 

natural gas pipeline property. 

SEPTEMBER 14, 2006 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 


pwalker on PRODPC60 with BILLS