Consent 4.
Regular Board of Supervisors Meeting
County Attorney
- Meeting Date:
- 04/20/2021
- Title:
- Proposed Settlement of the Tax Appeal in Southwest Gas Corporation v. Arizona Department of Revenue, et al., TX2020-001122
- Submitted By:
- Susana Stark, County Attorney
- Department:
- County Attorney
Presentation:
No A/V Presentation
Recommendation:
Approve
Document Signatures:
BOS Signature Required
# of ORIGINALS
Submitted for Signature:
Submitted for Signature:
1
NAME
of PRESENTER:
of PRESENTER:
Paul Correa
TITLE
of PRESENTER:
of PRESENTER:
Civil Deputy County Attorney
Docket Number (If applicable):
Mandated Function?:
Federal or State Mandate
Source of Mandate
or Basis for Support?:
or Basis for Support?:
Information
Agenda Item Text:
Approve the proposed settlement of the Tax Appeal in Southwest Gas Corporation v. Arizona Department of Revenue, et al., TX2020-001122, now pending in Arizona Tax Court, a division of the Superior Court of and for Maricopa County.
Background:
Plaintiff Southwest Gas Corporation filed a civil action in Arizona Tax Court, challenging the full cash value for centrally assessed property (natural gas service facilities), Tax Numbers 54-641, 64-641 and 65-641 (the “Subject Property”), located in Cochise County, which was valued by the Arizona Department of Revenue (“ADOR”) for tax year 2021. Plaintiff argued that ADOR’s valuation was excessive because it exceeded the market value and failed to recognize sufficient obsolescence.
As authorized by the Board of Supervisors on December 3, 2019, the Arizona Attorney General’s Office (“AG”) is representing Cochise County in this matter and has provided a proposed settlement for the Board’s consideration and approval. ADOR originally valued the subject property at a total full cash value of $2,679,921,000 for tax year 2021. Cochise County’s portion of that value was $92,560,718.
After a series of negotiations with Plaintiff, the AG was able to settle the matter for a full cash value of $2,464,921,000, of which Cochise County’s portion of that value is $85,011,968. The reduction in the full cash value of the Subject Property is allocated entirely to taxpayer identification number 54-641 (Transmission & Distribution), resulting in a new full cash value of $2,430,186,000. The full cash values for taxpayer identification numbers 64-641 (Environmental Protection Facilities) and 65-641 (CWIP) shall remain as originally determined, at $112,000 and $34,623,000, respectively. The AG is looking for approval to settle. The County Attorney’s Office has discussed the settlement with Cochise County Assessor, Phil S. Leiendecker and he agrees with the proposed settlement.
As authorized by the Board of Supervisors on December 3, 2019, the Arizona Attorney General’s Office (“AG”) is representing Cochise County in this matter and has provided a proposed settlement for the Board’s consideration and approval. ADOR originally valued the subject property at a total full cash value of $2,679,921,000 for tax year 2021. Cochise County’s portion of that value was $92,560,718.
After a series of negotiations with Plaintiff, the AG was able to settle the matter for a full cash value of $2,464,921,000, of which Cochise County’s portion of that value is $85,011,968. The reduction in the full cash value of the Subject Property is allocated entirely to taxpayer identification number 54-641 (Transmission & Distribution), resulting in a new full cash value of $2,430,186,000. The full cash values for taxpayer identification numbers 64-641 (Environmental Protection Facilities) and 65-641 (CWIP) shall remain as originally determined, at $112,000 and $34,623,000, respectively. The AG is looking for approval to settle. The County Attorney’s Office has discussed the settlement with Cochise County Assessor, Phil S. Leiendecker and he agrees with the proposed settlement.
Department's Next Steps (if approved):
Upon approval by the Board, the County Attorney’s Office will contact the AG and authorize settlement. The AG will prepare and finalize the settlement documents.
Impact of NOT Approving/Alternatives:
Additional litigation for the County over the full cash value of property that the County did not value, with the risk that the Court may: (1) rule in the taxpayers’ favor; (2) order a larger reduction in the assessed value of the subject property; and (3) order the County to pay the Plaintiffs’ fees and costs.
To BOS Staff: Document Disposition/Follow-Up:
Advise County Attorney's Office - Civil Division upon Board's approval.