Enbridge v. Wakeshma Township LP Pipeline Multiplier Appeal to Michigan Tax Tribunal

Update: 

On December 20, 2007, the Michigan State Tax Commission (STC) voted to make no changes to the STC’s personal property valuation multiplier Table K that it recommends to assessors for use in valuing fluid pipeline assets. The STC took that position based on a December 11, 2007, memorandum from Department of Treasury staff, and following submission of comments from both parties in the Enbridge Energy, LP v Wakeshma Township appeal. The STC also voted to use Table K for the 2008 tax year.  

Treasury Staff Table K Memorandum (.pdf) 

Wakeshma Township Memorandum in response to Treasury Staff Table K Memorandum (.pdf)

Also on December 20, 2007, the Michigan Tax Tribunal (MTT) issued a notice that addressed stipulations filed in cases involving Enbridge Energy, LP, including Enbridge Energy, LP v Wakeshma Township, MTT Docket No. 301679. The notice identifies provisions of the Wakeshma Township stipulation that the MTT considers to be “misleading.”   
December 20, 2007 Michigan Tax Tribunal Notice (.pdf) 

According to the MTT notice, townships that have stipulated with Enbridge Energy, LP, following the entry of consent judgment in Enbridge Energy, LP v Wakeshma Township, MTT Docket No. 301679, may be entitled to relief from their specific, individual consent judgments under Michigan Court Rule 2.612 Relief from Judgment or Order (MCR 2.612).

The notice also states that the Wakeshma Township stipulation has no precedential value. It should be noted that, according to the MTT, “the common issues of fact and law were not presented to the Tribunal for resolution.”   

A township that has already stipulated to an agreement with Enbridge could decide to seek relief from that agreement if the township determined, in consultation with its local legal counsel regarding the MTT notice and Department of Treasury memorandum issued since the Wakeshma Township stipulation, that it wished to instead defend the Table K multiplier in an Enbridge appeal to the MTT. Other considerations could include the potential legal costs to the township, the amount in question in a current appeal, and the potential for appeals of the Table K multiplier in future years. At this time, there is no indication of how the MTT will rule in an Enbridge appeal. 

The Michigan Townships Association is not a party to an Enbridge appeal or agreement. A township involved in an Enbridge appeal or stipulation should consult with its local legal counsel for specific guidance on possible courses of action and the risks associated with each.   

Michigan Tax Tribunal Rules, MTT Web site 

History: 

In June 2007, a stipulated agreement was reached between Enbridge Energy, Limited Partnership, and Wakeshma Township, Kalamazoo County, in what had been designated as a lead case in a liquefied petroleum pipeline appeal to the Michigan Tax Tribunal that was filed against approximately 200 townships in 2003. The stipulation was accepted by the MTT and a consent judgment was entered July 6, 2007.

The MTA Legal Defense Fund did not provide legal assistance to Wakeshma Township in its appeal, but provided some financial assistance. The total cost of the case was approaching $100,000, most of which was raised between about 60 townships and the MTA Legal Defense Fund.  

The Wakeshma Township agreement stipulated to an amount that was not as low as Enbridge originally claimed, but nonetheless was a significant reduction in valuation.   

In the settlement, the parties agreed to a methodology for the calculation of value. Enbridge offered the same terms from the Wakeshma stipulation to the other townships involved in the appeals.

The MTT held the other township appeals in abeyance awaiting the outcome of the Wakeshma appeal, then began scheduling those appeals following the stipulation. Townships whose cases had been held in abeyance were notified by the MTT of the procedures and deadlines for their individual cases.