Court Opinion

ID: 7919412
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:17:59.328963+00
Date Added: 2024-06-11T16:32:57.990467
License: Public Domain

Schroeder, J.,
concurring: After reconsideration of this case in the broader context of other ad valorem tax cases involving state assessed utilities pending before the court, I now join in the majority decision written for the court. (See Panhandle Eastern Pipe Line Co. v. Herren, 207 Kan. 400, 485 P. 2d 156; Panhandle Eastern Pipe Line Co. v. Dwyer, 207 Kan. 417, 485 P. 2d 149; Northern Natural Gas Co. v. Williams, 208 Kan. 407, 493 P. 2d 568; Northern Natural Gas Co. v. Bender, 208 Kan. 135, 490 P. 2d 399; and Northern Natural Gas Co. v. Dwyer, 208 Kan. 337, 492 P. 2d 147.)
My reasons briefly stated follow:
When this case was originally decided the court expressed an opinion that it was the Director’s order which was subject to review where appeal had been perfected to the district court pursuant to K. S. A. 1970 Supp. 74-2426. (See Panhandle Eastern Pipe Line Co. v. Herren, supra, at p. 404.) The opinion on this point has since been modified. (Panhandle Eastern Pipe Line Co. v. Herren, 208 Kan. 119, 490 P. 2d 416.)
It is now established that an appeal pursuant to 74-2426, supra, authorizing an appeal from an order of the State Board of Tax Appeals to the district court, presents the limited issue as to whether the order of the Board appealed from is “unreasonable, arbitrary or capricious.” Whether the State Board of Tax Appeals determines a matter of property valuation before it as an appeal board or as a board of equalization, it functions independently of the Director of Property Valuation in matters of administrative judgment and decision. (Northern Natural Gas Co. v. Dwyer, supra.)
Under these circumstances statements that may be regarded as admissions by the Director are not binding on the Board. Thus, what was construed as an admission by the Director — that Federal Power Commission regulation of the utility constituted economic obsolescence — was an erroneous premise used to support my dissent. There is no economic obsolescence by reason of F. P. C. regulation of Panhandle Eastern Pipe Line Company as demonstrated in Northern Natural Gas Co. v. Dwyer, supra, where the growth of Panhandle has been similar to the growth of Northern.
The capitalization rate of 5% used by the Director in this case involving Panhandle Eastern Pipe Line Company was not satisfactorily explained by the evidence in the record. It appeared *306when the decision was originally written that the selection of a 5% capitalization rate was purely arbitrary. Reconsideration of this case in the context of other ad valorem tax cases pending before the court discloses a valid basis for the capitalization rate used by the Department of Property Valuation and considered by the Board in making its determination. (See Northern Natural Gas Co. v. Dwyer, supra.)
It is impossible for me to agree, however, with the consideration given by the court to the issue involving the official sales ratio study for state assessed utility property. On this point my views are briefly expressed in my concurring opinion in Northern Natural Gas Co. v. Dwyer, supra.