Opinion
44867 Record No. 850153
November 27, 1985
Present: All the Justices
An SCC decision, holding that County taxes assessed on railroad property are not discriminatory, is affirmed where the taxes are assessed uniformly on all real property.
Taxation — Real Estate — Ad Valorem Taxation — Railroad Property — Discriminatory Taxation — Railroad Revitalization and Regulatory Reform Act
A County taxation scheme provided for a uniform tax rate on 100% of the fair market value of all real property within the County. Plaintiff, owner of easements for railroad purposes over land held by the United States, paid the tax and sued for a refund, alleging that the tax was discriminatory and violative of the Railroad Revitalization and Regulatory Reform Act. Plaintiff appeals from the SCC finding of no discrimination.
1. A County tax based on assessments of all real property at 100% of fair market value does not violate the first or second provisions of the Railroad Revitalization and Regulatory Reform Act, which deal with non-uniform assessments of property.
2. A County tax which assesses all real property at the same rate does not violate the third provision of the Act, which forbids an ad valorem tax which is greater for railroad property than for other commercial property.
3. An ad valorem real property tax which complies with the first three sections of the Act does not violate the fourth provision of the Act, which only addresses schemes of taxation other than ad valorem taxes.
Appeal from a decision of the State Corporation Commission.
Affirmed.
Urchie B. Ellis (Susan H. Pierce, on briefs), for appellant.
Charles G. Flinn, County Attorney, for appellee, Arlington County. No brief or argument on behalf of appellee, State Corporation Commission.
Richmond, Fredericksburg and Potomac Railroad Company (RFP) petitioned the State Corporation Commission (SCC) for correction of an allegedly erroneous 1983 assessment of four parcels of railroad property in Arlington County and for a refund of $150,544.71 in taxes paid to Arlington in 1983 based on the challenged assessments. The parcels involved form a part of the Potomac Yard, a large railroad classification and marshalling area located partly in Arlington County and partly in the City of Alexandria. This is the fourth time an appeal to this Court has arisen from questions concerning the taxation of the Potomac Yard, see Railroad Company v. Commonwealth, 203 Va. 294, 124 S.E.2d 206 (1962); RFP v. Corporation Commission, 219 Va. 301, 247 S.E.2d 408 (1978); and City of Alexandria v. RFP, 223 Va. 293, 288 S.E.2d 457 (1982).
RFP challenged the assessments on a number of grounds, but the SCC held that all except one ground had been litigated and decided adversely to RFP in the 1978 case and were subject to the bar of estoppel by judgment. The remaining ground raised by RFP was that the assessments violated the anti-discrimination provisions of the Railroad Revitalization and Regulatory Reform Act (the "4R Act") Sec. 306, 49 U.S.C. § 11503 (1976). After considering that contention, the SCC found no discrimination in the assessments.
The basis of RFP's challenge to the assessments is that RFP is the owner of easements for railroad purposes over the affected parcels of land, while the underlying fee remains in the United States pursuant to an indenture which settled a complex land dispute in 1938. RFP has the sole use of the affected land "for the construction, maintenance and operation of railroad tracks." If the land is abandoned or put to any other use, the easement will terminate and unencumbered title will vest in the United States. With the exception of the effect of the "4R Act," all questions raised by RFP in the present case, were raised and decided adversely to RFP in our prior decisions, particularly RFP v. Corporation Commission, 219 Va. at 318-20, 247 S.E.2d at 418-19. Upon stare decisis principles too familiar to require elaboration, we will give no further consideration to those arguments.
The "4R Act" provides, in pertinent part:
(b) The following acts unreasonably burden and discriminate against interstate commerce, and a State, subdivision of a State, or authority acting for a State or subdivision of a State may not do any of them:
(1) assess rail transportation property at a value that has a higher ratio to the true market value of the rail transportation property than the ratio that the assessed value of other commercial and industrial property in the same assessment jurisdiction has to the true market value of the other commercial and industrial property.
(2) levy or collect a tax on an assessment that may not be made under clause (1) of this subsection.
(3) levy or collect an ad valorem property tax on rail transportation property at a tax rate that exceeds the tax rate applicable to commercial and industrial property in the same assessment jurisdiction.
(4) impose another tax that discriminates against a rail carrier providing transportation subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title [ 49 U.S.C. § 10501 et seq.].
49 U.S.C. § 11503.
[1-2] The record indicates that all real property in Arlington County, including the four parcels under consideration, was assessed in 1983 at 100% of fair market value. Thus, the first and second subparagraphs of the "4R Act" are inapplicable. The record shows that all commercial and industrial property in Arlington County, including the parcels under consideration, was taxed in 1983 at a rate of 99 cents per $100 of assessed valuation. Thus, the third subparagraph is inapplicable.
Finally, Arlington County has clearly not imposed "another tax" which discriminates against railroads so as to violate subparagraph 4. The only tax challenged here is the ad valorem real property tax regulated by the first three subparagraphs and imposed in full compliance with those provisions. We agree with the SCC that the fourth subparagraph does not refer to ad valorem property taxes at all, but rather refers to other or different schemes of taxation not contemplated by the first three subparagraphs.
Because we conclude that the assessments challenged by RFP do not offend the provisions of the "4R Act", we will affirm the decision of the SCC.
Affirmed.