WPC r{>* J+Zʣ)ͿI@<⌱%G?\ᆕϭvk5a%zY[Ɓ[;u-jz!o b$WK'><- e_e7eN-g*V?8Tة~.&АQ}QmևZf Nxˈmբra %Oj[§3韟D Q "jG  5&b#\ % ^ # 0/ UN w 4 z  i x mz  N    0DfNMyEg/7 1 72 1u 728 0cj 1 72Z1b 0 B 0 D3q D- 0K ASo 05 0D AHP LaserJet 4050 Series PCL 6,,,,0f-s (`$.8dd8    ("  Z6Times New Roman Regular,- C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt3|xU Rs$      1    _ԀAnadjunctagencyoftheOfficeoftheComptroller.Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5(#$  0    Rs$      2    _Ԁ_ANR_ԀPipelineCo.;ColonialPipelineCo.;ColumbiaGulfTransmissionCo.;EastTennesseeNaturalGasCo.;  MidwesternGasTransmissionCo.;TexasEasternTransmissionCorp.;_Trunkline_ԀGasCo.;TexasGasTransmission t Corp. C Rs$      3    _ԀThe_ALJ_Ԁwentfurtherandruledthatcertainsurfaceequipmentwasrealpropertynotwithstandingthe  stipulationofthepartiestothecontrary. ] Rs$      4    _ԀTheseareentitiessuchasrailroad,telephonecompaniesandpipelineswhichareassessedby_OSAP_Ԁrather  thanbylocalcountyassessors.Tenn.CodeAnn.6751301.  Rs$      5    _ԀTheeasementexpireswhennolongerusedforthepurposeexpressed.(CEMU]emu}AutoList1(1)(1)(1)(1)(1)(1)(1)(1)(1)3#37=CIQYag1.a.i.(1)(a)(i)1)a)i)(;3$2#  0  .3  0  (CEMU]emu}AutoList2(1)(1)(1)(1)(1)(1)(1)(1)(1) ' Rs$      6    _ԀThepipelinesarenottradefixtures,whichareitemsbroughtuponthelandbyatenantforthepurposeof  carryingonabusiness.Theyremainpersonalty.Thisprincipleislimitedtosituationsinvolvinga_landlord_Ԁandtenant t relationship.See, Saundersv._Stallings_ ,52_Tenn.65(1871).- -(|G2s$ !.8IdXXd8         0   d(|3Ii$ !.8IdXXd8     VVVV'dxd)!dxdx( $ Figure  1  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3Ii$ !.8IdXXd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK !.8Idd8     _  I8XXdd8  @ ZIINTHECOURTOFAPPEALSOFTENNESSEE  @kk$ATNASHVILLE#IZ #Ԉ &   February20,2002Session L XXI #IXX#_ANR_ԀPIPELINECO.,COLONIALPIPELINECO.,COLUMBIAGULF J TRANSMISSIONCO.,etal.v.TNBOARDOFEQUALIZATIONXXI   ^ @@ DirectAppealfromtheTennesseeStateBoardofEqualization  ^ @@*AV) ` dE< ` A  6  @@TTNo.M200101098_COA_ԄR12CV 1  No.M200101117_COA_ԄR12CVFiledDecember19,_2002_   No.M200101119_COA_ԄR12CV   AV) ` dE<` A      Pipelinesforthetransportofpetroleumproductswereinstalledsubsurfacebyvariouscompanies  whichacquiredeasementsoveraffectedfreeholds.Thesepipelineswereassessedasrealestatefor x purposesoftaxation.PetitionsforReviewwerefiledbythePipelineCompaniesallegingthatthe d pipelineswerepersonalproperty.ThedecisionoftheBoardofEqualizationisreversed. P  Tenn.R.App.P.12(I)DirectAppellateReview;JudgmentoftheTennesseeStateBoardof (x EqualizationisReversedandRemanded  d   BenH._Cantrell_,_P.J._,M.S.,PatriciaJ.Cottrell,J.#IXX#XXIԀandJohnB._Hagler_,Sp.J.#IX#XX.I < (Harlan_Dodson_,III,andPaulParker,Nashville,Tennessee,fortheappellant,_ANR_ԀPipeline.  EverettB.Gibson,Memphis,Tennessee,andRonL.Quigley,Atlanta,Georgia,fortheappellant,  ColonialPipelineCompany.  BrigidM.Carpenter,Nashville,Tennessee,JamesW.McBride,Washington,D.C.,andStephen `!  _Dorr_ԀGoodwin,Memphis,Tennessee,fortheappellants,ColumbiaGulfTransmission,East L"! TennesseeNaturalGas,MidwesternGasTransmission,SouthernNaturalGasCompany,Tennessee 8#" GasPipelineCompany,TexasEasternTransmissionCorporation,TexasGasTransmissionCorp., $$t# and_Trunkline_ԀGasCo. %` $ PaulG.Summers,AttorneyGeneralandReporter;MichaelE.Moore,SolicitorGeneral;MaryEllen &8"& Knack,AssistantAttorneyGeneral;RobertLee,StaffAttorney,fortheappellee,StateofTennessee. '$#'    `     h      p     JamesCharlesandJennifer_Clinard_Ԁ_Surber_,Nashville,Tennessee,for_Intervenor_,Metropolitan )$) GovernmentofNashville&DavidsonCo. *%* JeanDyerHarrison,Nashville,Tennessee,andJeffreyDean_Moseley_,Franklin,Tennesseefor p,', _Intervenor_,WilliamsonCountyGovernment.   \-(- _    OPINION #IXXV #XXI  @gg% PERCURIAM       TheOfficeofStateAssessedProperties[OSAP]  #  1      ׀classifiedtheappellantspipelinesasreal L  property,ascontrastedtopersonalproperty,forpurposesofadvalorem#IXX#XXItaxassessments,beginning 8  in1997.Theseactionsarethegenesisoftheresultingadministrativeproceedingsinitiatedbythe $ t affectedcompaniesT #  2      ׀[PipelineCompanies]contestingthevalidityoftheclassification.  `   InaccordancewithTenn.CodeAnn.6751505theBoardofEqualization[Board]  8  appointedanAdministrativeLawJudge[ALJ]toconductahearingoftheconsolidatedcases.By $  separateOrdersissuedinJanuary2000,theALJupheldtheclassificationbyOSAP.h #  3      ׀Thisdecision   wasappealedtotheAssessmentAppealsCommissionwhichcertifiedtheclassificationquestionto   theBoard.     Thefinaladministrativeauthorityfortheassessmentofallcentrallyassessedutilities #  4      ׀isthe p BoardofEqualization,seeTenn.CodeAnn.6751328,which,inMarch2001,issuedanopinion \ sustainingtherulingoftheALJ.AsprovidedbyRule12,Tenn.R.App.P.,thePipelineCompanies H appealeddirectlytothiscourt.Presentedforreviewisthedispositiveissueofwhetherthepipelines 4 arerealorpersonalproperty.Ourreviewisdenovoontherecordwithnopresumptionof  p correctness.TennesseeCodeAnnotated45322(h)providesthebasesforthemodificationor  \ reversaloftheBoardsdecision. H    Analysis    #IXX#XXI  Theclassificationofpropertyasrealorpersonalisimportantbecauseofdecisionsofthe  Boardtoequalizethelevelofassessmentoftangiblepersonalpropertyofcentrallyassessedutilities  suchasthePipelineCompanies,andthelevelofassessmentoflocallyassessedtangiblepersonal  property.Since1997theBoardhasordereda15percentreductionintheassessedvalueofcentrally l assessedtangiblepersonalpropertyinordertobringittothesamelevelofassessmentaslocally X  assessedtangiblepersonalproperty.Forthisreason,ithasbeennecessaryforOSAPtodetermine D! thelegalnatureofthepropertiesownedbythePipelineCompaniesinTennessee.ThePipeline 0"  CompaniesandOSAPagreedontheclassificationofallofthecompaniespropertyexceptthe   pipelines.ThepartiesstipulatedthattheonlyissuebeforetheAdministrativeJudgewasthe  properclassificationofthepipelines.Thepartiesfurtherstipulatedthattheappropriatedefinition  of pipelinesiscontainedintheUniformSystemofAccountspromulgatedbytheFederalEnergy t RegulatoryCommission.AccountNo.367ofthesystemofaccountsdefinestheelementsof `  transmissionsystemmains.Amongotherthings,theitemslistedunderthedefinitionof L   pipelinesincludevalveoperatingmechanisms,bypassassemblies,cathodicprotectionequipment, 8  pipecoding,andthepipesandfittings. $ t   ThebusinessofthePipelineCompaniesimplicatesinterstatecommerceandthusisregulated  L  byFederallawforthemostpart.Toinstallapipeline,easementsmustbeacquiredfromaffected  8  landowners.Theseeasementsprovidethatforarecitedconsiderationtheowner(s)oftheaffected $  realestateconveystothepipelinecompanyaneasementto lay,construct,maintain,operate,alter,   repair,replace,move,andremovepipelines....alongaroutetobeselectedby[thePipeline   Company]under,upon,over,andthroughthelandsofgrantor...Theeasementfurtherprovides   thatthe [PipelineCompany]agreestopaytotheownerofsaidlandandtoanytenantorlessee   thereof...anydamagestofences,growingcrops,andtimberwhichmaybecoveredbyconstructing p ...replacing...movingorremovingthepipelines... #  5      ׀(Emphasissupplied). \   AsfoundbytheBoardandnotdisputed,thesalientfactsmaybequicklysummarized. 4 8  8`   ColonialPipelinetransportspetroleumproductsthroughover5,000  \ milesofpipelinerunningfromTexastoNewJersey,including387 H milesofmainandstublinesinelevenTennesseecounties.Theother 4 companiestransportnaturalgasthroughequallyextensivenetworks   connectingsuppliesfromtheGulfofMexicotodistributorsand   distributionsiteslocatedthroughouttheeasternUnitedStates.These  networksrangefrom4miles(Midwestern)to1,202miles(Tennessee  Gas)inTennessee.Totalassessmentsoftheportionofappellants  propertyallocatedtoTennessee,areabout$250million.l` x` x 8  8`    Thepipeiscoatedsteelinstalledgenerallyin40footsections X  andhavingdiametersupto40inches.Jointsarecarefullyweldedand D! recoated.Linesareburiedtypicallyunder30inchesormoreofsoil 0"  andlieonapreparedbedofgravel.Atperiodicintervalsthereare #l! valvesandsurfacepumpinganddistributionstations.Withproper $X"  cathodicprotection(electriccurrentsthatinhibitcorrosion),thelife $D # ofthepipelineisindefinite.Itisinfrequentlymoved,andremoval %0!$ usuallyoccursbecauseofchangesinpopulationortrafficpatternsat &"% thesurfacethatrequirereroutingorreplacementofpipesections.It '#&  isusuallynoteconomicallyfeasibletoreuseremovedpipeelsewhere (#' inthepipeline,thoughscrappedpipeoftenfindsitswayintoavariety  ofsurfaceuses,suchassupportsforbillboards.` x` x    Maintenanceofpipelinesisanongoing,constantnecessity.Pipedamagedinvariousways, t suchasbycorrosion,orstruckbyheavyequipment,mustbereplaced.Ifpipelinesarereplaced, ` removed,orrepairedthelandisalwaysrestored,andpipelinescanberemovedwithoutdamageto L  therealestate.Portionsofapipelineareroutinelymovedtofacilitatetheconstructionofhighways 8  andbuildings,andforotherreasons,thechiefonebeingthatthelandownerrequeststheremoval. $ t   Thepartiesagreethattheresolutionofthisappealiscontrolledbyapplicationofthe  L  followingdefinitionsofrealandpersonalpropertycontainedinthepropertytaxprovisionsofthe  8  TennesseeCode: $   (83! !"3"  8  3522(  9  )3  0`     Realpropertyincludeslands,tenements,hereditaments,structures,   improvements,movablepropertyassessableunder675802,ormachinery   andequipmentaffixedtorealty(exceptasotherwiseprovidedforherein)and   allrightstheretoandintereststherein,equitableaswellaslegal.352n2݌p` `  Ќ   (88 ! !"3 "  8  352(  12  )3  0`     Tangiblepersonalpropertyincludespersonalpropertysuchasgoods, H chattels,andotherarticlesofvaluewhicharecapableofmanualorphysical 4 possession,andcertainmachineryandequipment,separateandapartfrom  p anyrealproperty,andthevalueofwhichisintrinsictothearticleitself.35V5݌ \` `  Ќ  Tenn.CodeAnn.675501. 4   Thepipelinedoesnotenhancethevalueofthefreehold,andisnotanimprovementtothe   freehold.Itis separateandapartfromthefreehold;theownersofthelandtraversedbythe  pipelinehavenoclaimorinterestinthepipesorappurtenantequipment.Thepipelineisnotaffixed  tothelandinthelegalsense,becauseitcanbe,andsometimesis,moved.In Dudzickv.Lewis ,135  S.W.2d496(Tenn.1939)theCourtexplainedthat l 8  [i]tisnowthegenerallyrecognizedrulethatthemannerofannexingchattelstorealty D! isnotthecontrollingconsiderationindetermingwhetherornotthechattelsbecomes 0"  apartoftherealty.Thequestionoftheintentionofthepartiestoaleaseisgenerally #l! heldtobecontrollingindeterminingindoubtfulcaseswhetherornotachattel $X" annexedtorealtybecomesapartthereofandthepropertyofthelessor.$D #      `     h      p     Weagreethatsimplybecausethepipelineisburiedthreefeetundergroundisnot &"% determinativeoftheissue.Theintentionofthepartiescontrol.Wedonotbelievethatupon '#& completionoftheconstructionofthepipelinetitletherebypassedtothelandownerasitwouldhave (#' iftheBoardspositionisthecorrectone. )$(   Inthisjurisdiction,thelawoffixturesiscontrollingoftheissueatBar. h+&* Ї8  8`   InTennesseeonlythosechattelsarefixtureswhicharesoattachedto  thefreeholdthat,fromtheintentionofthepartiesandtheusesto  whichtheyareput,theyarepresumedtobepermanentlyannexed,or  aremovalthereofwouldcauseseriousinjurytothefreehold. t  Johnsonv.Patterson ,13Lea[81Tenn.],626; DeGraffenreidv. ` Scruggs ,4Humph.[23Tenn.],451,40Am.Dec.658; UnionBank L  &TrustCo.v.[FredW.]Wolfe ,114Tenn.255,86S.W.310,108 8  Am.St.Rep.,903,4Ann.Cas.1070.Theusualtestissaidtobethe $ t intentionwithwhichachattelisconnectedwithrealty.Ifitis  ` intendedtoberemovableatthepleasureoftheowner,itisnota  L  fixture. 8 ` x` x  Hickmanv.Booth ,131Tenn.32,173S.W.438(1914).Seealso HarryJ.WhelchelCo.v.  King ,   610S.W.2d710(Tenn.1980); MemphisHousingAuthorityv.MemphisSteamLaundryCleaner,   Inc. ,463S.W.2d677,679(Tenn.1971).     Thelawoffixturesconcernstherelativeprioritiesofownershiptoaparticularitemof p personalproperty.See,e.g., Greenv.Harper ,700S.W.2d565(Tenn.Ct.App.1985)(dispute \ betweenlessorandformerlesseeoverpropertypreviouslyinstalledonthepremisesbylessee H whereinitwasstatedthatthequestionwasoneofintentionand relationoftheparties); HarryJ. 4 WhelchelCo.v.King, supra,(questionofintentand characteroftheparties).Therecanbeno  p doubt,aswehavesaid,thattheintentofthepartiesisthesingledispositivefactorindetermining  \ whetheranitemofpersonalpropertyisafixture,andthuswillbedeemedtobeapartoftherealty H uponwhichitisattached. MemphisHousingAuthorityv.MemphisLaundry ,supra; Knoxville 4 GasCo.v.W.I.Kirby&Sons ,32S.W.2d1054(Tenn.1930); Hubbardv.HardemanCountyBank ,   868S.W.2d656(Tenn.Ct.App.1993).      Tobelaborthepoint,thepartiesintentisthedominantthemeinpracticallyallofthecases  addressingthelawoffixtures.Butnoteventhissinglestatementiscapableofapplicationinall | situationsowingtothedifficultyencounteredinattemptingtodiscoverintent,particularlyincases h where,ashere,theissueisraisedbythetaxingauthorityinpurportedrelianceuponastatute. As T  betweenthelandownerandthePipelineCompanytherecanbenodoubtthatthepipelinesare @! personalproperty.! #  6       Itwasclearlyneverintendedbyeitherpartythatthepipes!obviouslypersonal ,"|  propertybeforebeingrolled intothetrench!wouldnotlosethatstatussimplybybeingcoveredover #h! toenablethelandownertoresumethesurfaceuseofhisland.Otherwise,thepipelinebecamethe $T" propertyofthelandownersubjectonlytotheprovisionsoftheeasement,anobviouslyunintended $@ # result.Thestatutorydefinitionofrealproperty!withrespecttothetaxingpower!isnotessentially %,!$ differentfromthecommonlawdefinition; affixedtotherealtyistheoperativestatutoryphrase, &"% whichimplicatesintent.See, Dudzick ,supra. '#& Ї  ThePipelineCompaniesexercisecompletedominionandcontroloverthepipeintheground,  andcanmoveithoweverandwhenevertheyseefit.Thereisnoevidencethatthepartiesintended  orexpectedthatthepipelineswouldeverbecomeapermanentfixtureuponthefreehold.No  landownercanseriouslyclaimownershipofthepipesimplybecauseithappenstobeburiedinhis t land.Tothecontrary,thepipeistreatedaspropertybelongingtothePipelineCompanieswhichthey ` canremoveattheirpleasure.Theeasementssoprovide.Thissinglefactissufficienttoprovethe L  intentofthepartiesandthusmandatethatthepipelinesarepersonalpropertyunderTennesseelaw. 8   HarryJ.WhelchelCo.v.King ,supra; MemphisHousingAuthorityv.MemphisS.L.C. ,supra. $ t   ThedecisionoftheBoardisreversedandthiscaseisremandedtotheBoardfortheentryof  L  anorderthatthepipelinesandsurfaceequipmentshallbetreatedaspersonalpropertyforpurposes  8  ofadvaloremtaxation.Costsareassessedtotheappellee. $     `     h   PERCURIAM