Appeal from the United States District Court for the Western District of Wisconsin.
No. 94 C 476--John C. Shabaz, Judge.
Before CUMMINGS and RIPPLE, Circuit Judges, and WILL, District Judge. *fn*
In Oregon Dept. of Revenue v. ACF Industries, 114 S.Ct. 843, the Supreme Court held that a state's exemption of various classes of non-railroad property from a generally applicable ad valorem property tax are not cognizable under the Railroad Revitalization and Regulatory Reform Act (the "Act"), 49 U.S.C. sec. 11503(b)(4). Plaintiffs--all railroads operating and taxed in the state of Wisconsin--nonetheless appeal the district court's grant of summary judgment against them, arguing that because Wisconsin's property tax exempts 80 percent of non-railroad commercial and industrial property, it is not a tax of general application.
Railroads " 'are easy prey for State and local tax assessors' in that they are 'nonvoting, often nonresident, targets for local taxation,' who cannot easily remove themselves from the locality." Western Air Lines, Inc. v. Board of Equalization, 480 U.S. 123, 131 (quoting S.Rep. No. 91-630, p.3 (1969)). Congress provided statutory protection from discriminatory taxation in the Act. Section 11503(b), at issue in the present case, provides:
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. . . .
In the present appeal, the railroads do not allege a discriminatory assessment or rate as proscribed by subsections (b)(1)-(3). They argue instead that because Wisconsin exempts so much (the parties stipulated to a figure of 80 percent in prior litigation) of the taxable commercial and industrial personal property in the state, that Wisconsin's ad valorem property tax--though nominally one of general application--is in fact "another tax that discriminates against a rail carrier" violative of subsection (b)(4).
In ACF Industries, a suit challenging Oregon's ad valorem property tax by eight lessors of railroad cars, the Supreme Court rejected this same argument made by these same lawyers. The Court did not reach the validity of Oregon's tax because it found as a preliminary matter that a tax on railroad property is not subject to challenge under subsection ...