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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. City of Valdez v. State (4/29/2016) sp-7100

City of Valdez v. State (4/29/2016) sp-7100

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

          Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

                                                                                                               

          303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                                                 

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                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  



CITY  OF  VALDEZ,                                               )  

                                                                )     Supreme  Court  No.  S-15840  

                              Appellant,                        )  

                                                                                                                             

                                                                )     Superior Court No.  3AN-13-08917 CI  

          v.                                                    )  

                                                                                         

                                                                )     O P I N I O N  

                                                          E  

STATE OF ALASKA, NORTH SLOP                                     )
  

                                                  

BOROUGH, and FAIRBANKS NORTH  )                                                                        

                                                                     No. 7100 - April 29, 2016
  

            

STAR BOROUGH,                                                   )
  

                                                                )  

                              Appellees.                        )  

                                                                )  



                                                                                                      

                    Appeal from the Superior Court of the State of Alaska, Third  

                                                                                        

                    Judicial District, Anchorage, John Suddock, Judge.  



                                                                                                           

                    Appearances: Robin O. Brena, Laura S. Gould, and Jon S.  

                                                                                                         

                    Wakeland,  Brena,  Bell  &  Clarkson,  P.C.,  Anchorage,  for  

                                                                                                

                    Appellant.          Mary  Hunter  Gramling,  Assistant  Attorney  

                                                  

                    General, and Craig W. Richards, Attorney General, Juneau,  

                                                                                               

                    for Appellee State of Alaska.  No appearance by Appellees  

                                                                                             

                    North Slope Borough and Fairbanks North Star Borough.  



                                                                                                         

                    Before: Stowers, Chief Justice, Fabe, Winfree, Maassen, and  

                                 

                    Bolger, Justices.  



                                      

                    BOLGER, Justice.  



I.        INTRODUCTION  



                                                                                                                            

                    Under  a  Department  of  Revenue  regulation,  all  appeals  of  oil  and  gas  



                                                                                                           

property tax valuation must be heard by the State Assessment Review Board (SARB),  


----------------------- Page 2-----------------------

while appeals of oil and gas property taxability must be heard by the Department of                                                                                                                                         



Revenue (Revenue).                                       Three municipalities challenged this regulation, arguing that it                                                                                        



contradicts a statute that grants SARB exclusive                                                                                      jurisdiction over                              all appeals from               



Revenue's  "assessments"   of   oil   and   gas   property.     The   superior   court   upheld   the  



regulation as valid, concluding that it was a reasonable interpretation of the statute.                                                                                                                                But  



we conclude that the regulation is inconsistent with the plain text, legislative history, and                                                                                                                            



                                                                                                                                                                                                   1  

purpose of the statute; therefore, we reverse the superior court's judgment.                                                                                                                           



II.               FACTS AND PROCEEDINGS                  



                 A.                Regulatory Background   



                                   The   Alaska   Constitution   grants   the   legislature   the   authority   to   set  



"[s]tandards   for   the   appraisal   of   all   property   assessed   by   the   State   or  its  political  

                                     2     In 1973 the legislature used this authority to establish an overarching  

subdivisions."                                                                                                                                                                                    

regime for the statewide assessment of oil and gas property3  in order to levy ad valorem  

                                                                                                                                                                                                            



                  1                This full opinion follows our earlier summary order resolving this appeal.                                                                                                  



See City of Valdez v. State                                          ,  et al.       , ___ P.3d ___, Order No. 89 (Alaska Jan. 29, 2016).                                                                     



                 2                 Alaska Const. art. IX,  3.  

                                                                                                         



                 3                 To constitute taxable oil and gas property, the property must be "used or  

                                                                                                                                                                                                                            

committed by contract . . . for use within [Alaska] primarily in the exploration for,  

                                                                                                                                                                                                                        

production of, or pipeline transportation of gas or unrefined oil . . . , or in the operation  

                                                                                                                                                                                                         

or maintenance of facilities used [for such purposes]." AS 43.56.210(5)(A). The statute  

                                                                                                                                                                                                                 

then enumerates specific types of property that do and do not constitute oil and gas  

                                                                                                                                                                                                                        

property.  See AS 43.56.210(5)(A)-(B).  Revenue has adopted a regulation that defines  

                                                                                                                                                                                                               

property with the requisite "primary use" as property that is "committed by contract,  

                                                                                                                                                                                                          

specification, or other expressed intention of the property owner to one or more of these  

                                                                                                                                                                                                                    

purposes," or property that is actually used for such purposes more than 50 percent of  

                                                                                                                                                                   

its  total  operation  time  in  the  year  preceding  the  assessment  year.                                                                                                                        15  Alaska  

                                                                                                                                                                                                             

Administrative Code (AAC) 56.075(a) (2015).  

                                                                                                       



                                                                                                             -2-                                                                                                    7100
  


----------------------- Page 3-----------------------

           4  

taxes.   Under this statewide regime, codified at AS 43.56, the State taxes oil and gas                                                                 



property at 20 mills, and municipalities are permitted to tax oil and gas property located                                                       

                                                                                                                   5  But the State, through  

within their boundaries at the same rate as they do local property.                                                                             



Revenue, manages this assessment process, determining whether property is taxable  

                                                                                                                                                 

under AS 43.56 and, if so, its taxable value.6  

                                                                      



                        The assessment process begins each year in January when oil and gas  

                                                                                                                                                        

property owners file returns listing and describing their taxable oil and gas properties.7  

                                                                                                                                                                



Revenue may then choose to investigate any information included or omitted on the  

                                                                                                                                                        

return.8  It must also make an initial taxability determination whether an asset is properly  

                                                                                                                                               

deemed  taxable  oil  and  gas  property  under  the  statute.9                                                Revenue  then  ascribes  a  

                                                                                                                                                           



valuation to the property, which becomes prima facie evidence of the property's full  

                                                                                                                                                        

           10   Next, Revenue issues an assessment roll listing all taxable oil and gas property  

value.                                                                                                                                         

for that year and its assessed value.11  On or around March 1 of each year, Revenue sends  

                                                                                                                                                    



an assessment notice to each owner whose property is included on the assessment roll,  

                                                                                                                                                       



            4           Ch.   1,  1,  FSSLA   1973.  



            5           AS  43.56.010(a)-(b).  



            6           AS   43.56.060.   Revenue   is   permitted   to   enter   into  joint   or   cooperative  



assessment  administration  agreements  with  municipalities,  but  has  never  entered  into  

such  an  arrangement  with  Valdez.   AS  43.56.060(g).   



            7           AS 43.56.070(a); 15 AAC 56.005(a).  

                                                                          



            8           AS 43.56.080.  

                                



            9           See AS 43.56.210(5).  

                                        



            10          AS 43.56.080(a).  

                                                          



            11          AS 43.56.090.  

                                



                                                                            -3-                                                                     7100
  


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                                                                                                 12  

and a copy of the notice to each relevant municipality.                                              The statutory scheme provides            



both taxpayers and affected municipalities with a series of appeals of this preliminary                                                 

                                                      13                             14  then to the superior court for a trial  

                                                          then to SARB,                                                                              

assessment, first to Revenue,                                            

                15   Revenue must then issue a final assessment roll by June 1 of each year.16  

de novo.                                                                                                                                     

      



                        After thelegislatureinitially established this assessmentscheme,allappeals  

                                                                                                                                                

of Revenue's oil and gas property tax assessments were heard by SARB.17                                                                       In 1986  

                                                                                                                                                    

Revenue promulgated a more detailed framework to govern these appeals.18   Under this  

                                                                                                                                                       



framework, appeals of Revenue's valuation of a property proceed on a separate track  

                                                                                                                                                    



from appeals of Revenue's determination that a property is taxable under AS 43.56.  A  

                                                                                                                                                          



property owner or municipality appealing Revenue's valuation of oil and gas property  

                                                                                                                                      



must appeal first to Revenue; Revenueissues an informal conferencedecision,which can  

                                                                                                                                                       



            12          AS  43.56.100.  



            13          AS  43.56.110.   



            14          AS  43.56.120.    SARB   is   a   specialized  board   comprised   of   five  persons  



knowledgeable   about  assessment  procedures  who   are   appointed  by  the  governor   and  

subject  to  legislative  confirmation.   AS  43.56.040.   



            15          AS 43.56.130(i).  

                                                         



            16          AS 43.56.135.  

                                



            17          See Alyeska Pipeline, No. 001-000-0015 (State Assessment Review Bd.  

                                                                                                                                                       

Dec. 9, 1974).  

                            



            18          This regulation was  amended once, in 2003, to  grant a municipality  an  

                                                                                                                                                        

identical  right  to  that  of  a  taxpayer  to  appeal  Revenue's  determination  of  whether  

                                                                                                                                              

property is taxable.  Compare 15 AAC 56.015 (eff. 5/10/86), with 15 AAC 56.015 (am.  

                                                                                                                                                     

 1/1/03).  



                                                                            -4-                                                                    7100
  


----------------------- Page 5-----------------------

                                        19  

be appealed to SARB.                        SARB's decision can then be appealed to the superior court for                                              



                            20  

a trial de novo.                                                                                                                          

                                  In contrast, a property owner or municipality appealing Revenue's  



                                                                                                                                            

determination whether property is taxable under AS 43.56 must also appeal to Revenue,  

                                                                                        21   but  an  appeal  from  this  informal  

                                                                                                                                             

                                                                        

which  issues  an  informal  conference  decision; 



conference decision is heard by a hearing officer appointed by the Commissioner of  

                                                                                                                                                         

Revenue, not by SARB.22                           The hearing officer's decision can then be appealed to the  

                                                                                                                                                       

superior court,23  but the decision to grant a trial de novo is left to the discretion of the  

                                                                                                                                                       

superior court judge.24  

                                            



                        This regulation also modified who is granted party status in such appeals.  

                                                                                                                                               



Previously, both property owners and affected municipalities were afforded party status  

                                                                                                                                                   



in all appeals, while the new regulation affords affected municipalities different rights  

                                                                                                                                                   



depending  on  what  the  appeal  concerns:                                      in  valuation  appeals  before  SARB  both  

                                                                                                                                                    



            19           15AAC56.015(a)                   (appealprocedures); 15AAC56.020(c)(Revenueissues                                         



informal conference decision); 15 AAC 56.030 (appeal to SARB).                                                            



            20          AS 43.56.130(i).  

                                                         



            21           15 AAC 56.015(b)-(c); 15 AAC 05.020.  

                                                                                     



            22           15   AAC   05.030.   Procedures   for   such   appeals   are   governed   by  

                                                                                                                                                      

 15 AAC 05.001-.050.  

                 



            23           15 AAC 05.040; Alaska R. App. P. 601(b).  

                                                                                          



            24          Alaska R. App. P. 609(b)(1); see also City of Valdez v. State, Dep't of  

                                                                                                                                             

Revenue,  Nos.  3VA-00-00022  CI,  3VA-10-00084  CI, 3AN-11-07874  CI, (consol.)  

                                                                                                                                            

(Alaska  Super.,  Nov.  18,  2013)  (noting  that  the  superior  court  had  earlier  denied  

                                                                                                                                                

Valdez's request for a trial de novo in an appeal from a decision of the Commissioner  

                                                                                                                                   

of Revenue on the issue of taxability under AS 43.56).  

                                                                                                     



                                                                            -5-                                                                    7100
  


----------------------- Page 6-----------------------

                                                                                                                                                      25  

property owners and the relevant                                               municipality have party status,                                             but in taxability     

appeals before Revenue only the appellant is afforded party status.                                                                                 26  



                      

               B.             Facts  



                                                                                                                                                                               

                              TheTrans-AlaskaPipeline System(TAPS) is an800-mile-long oilpipeline  



                                                                                                                                                                                                  

system  that  connects  the  North  Slope  oil  fields  to  a  shipping  terminal  in  Valdez.  



                                                                                                                                                 

En route it crosses through the North Slope Borough (NSB), the Fairbanks North Star  



                                                                                                                                                                                            

Borough (FNSB), and the City of Valdez.  In February 2013 Revenue issued a notice of  



                                                                                                                                            27  

                                                                                                                                                                                     

assessment for oil and gas property held by the TAPS owners                                                                                      for Assessment Year  



                                                                                                                                                                                          

2013.             The  TAPS  owners  appealed  this  notice  of  assessment,  objecting  both  to  



                                                                                                                                                                                           

Revenue's assessed value of the property and its determination that certain pieces of  



                                                                                                                                             

property were taxable as oil and gas property under AS 43.56.  



                                                                                                                                                                               

                              The TAPS owners' two appeals proceeded simultaneously on two separate  



                                                                                                                                                                                   

tracks:  Revenue issued an informal conference decision on the valuation appeal, which  



                                                                                                                                                                                      

the owners appealed to SARB, then further appealed to the superior court for a trial  



                                                                                                                                                                                         

de novo.                 The affected  municipalities also  cross-appealed  SARB's decision  on  the  



                                                                                                                                                                             

valuation appeal to the superior court.  Revenue issued a separate, confidential informal  



               25             15 AAC 56.020(b).                            



               26             15 AAC 56.015(b)-(c) (taxability appeals governed by 15 AAC 05.001-                                                                              



.050); 15 AAC 05.001-.050 (containing no provision for party status as of right).                                                                                                      For  

example,  if  a  property  owner  objected  to  a  taxability  determination,  an  affected  

                                                                                                                                                                             

municipality would not be able to participate in the taxability appeal until the property                                                                                    

owner exhausted all administrative appeals and the matter became ripe for appeal to the                                                                                                   

superior court.  

                                  



               27             At  the  time  of  the  2013  assessment  TAPS  was  jointly  owned  by  BP  

                                                                                                                                                                                         

Pipelines  (Alaska),  Inc.;  ConocoPhilips  Transportation  Alaska,  Inc.;  ExxonMobil  

                                                                                                                                                                  

Pipeline Company; Unocal Pipeline Company; and Koch Alaska Pipeline Company.  

                                                                                                                                                                                                  

Alyeska Pipeline Service Company served as the agent for the TAPS owners.  

                                                                                                                                                                              



                                                                                             -6-                                                                                     7100
  


----------------------- Page 7-----------------------

conference decision on the TAPS owners' taxability appeal, dismissing the appeal for                                                                    



lack of jurisdiction after it found that the appeal actually raised issues of valuation, which                                                    



"are   within   the   exclusive   jurisdiction   of   .   .   .   SARB   under   AS   43.56.120   [and]  



                               28  

[AS 43.56].130."                    



                        The TAPS owners appealed this decision to the Commissioner for a formal  

                                                                                                                                                 



conference.  The TAPS owners and the State then jointly filed a stipulation and motion  

                                                                                                                                                



requesting that the decision dismissing the taxability appeal for lack of jurisdiction be  

                                                                                                                                                         



adopted as the final administrative decision of Revenue for purposes of further appeal  

                                     



to the superior court.  The TAPS owners also filed an unopposed motion to stay the  

                                                                                                                                                       



taxability appeal pending resolution of their separate valuation appeal by the superior  

                                                                                                                                              

court,29  which the hearing officer granted.  

                                                                               



            C.          Proceedings  

                  



                        After repeatedly attempting but failing to obtain information regarding the  

                                                                                                                                                        



status of the TAPS owners' taxability appeal, theaffected municipalities filed complaints  

                                                                                                                                          



for declaratory and injunctive relief with the superior court. NSB first filed, then Valdez  

                                                                                                                                                 



and FNSB (collectively "the intervenors") successfully intervened in the case without  

                                                                                                                                               



opposition, and jointly filed a separate complaint.  The municipalities all challenged the  

                                                                                                                                                        



validity of 15 AAC 56.015(b)-(d), Revenue's regulation governing taxability appeals  

                                                                                                                                               



from assessments of oil and gas property; they argued that this regulation impermissibly  

                                                                                                                                    



delegates theauthority to decidetaxability appeals to Revenue, contravening thestatute's  

                                                                                                                                               



            28          The   municipalities   did   not   have   access   to   this   docket,   and   thus   were  



unaware   of   this   decision   on   the   owners'   taxability   appeal,   until   they   filed   suit   for  

declaratory relief.                



            29          The valuation appeal is itself stayed before the superior court, pending  

                                                                                                                                              

resolution of North Slope Borough v. BP Pipelines (Alaska) Inc., No. 3AN-06-08446 CI,  

                                                                                                                                                        

which the parties have recently settled.  

                                                                        



                                                                            -7-                                                                    7100
  


----------------------- Page 8-----------------------

grant   of   authority   to   SARB   to   hear   all   appeals  from   initial   assessments   of   such  



                    30  

property.                



                            The intervenors then filed a motion for summary judgment, on which the  

                                                                                                                                                                                  



superior court ruled in a consolidated order, denying the municipalities' requests to  

                                                                                                                                                                                    

invalidate the regulation.31  The court conceded that Revenue's interpretation was not the  

                                                                                                                                                                                  



only or  even  the most reasonable interpretation but nonetheless concluded that the  

                                                                                                                                                                                 



regulation was a permissible interpretation of the statute. The superior court then entered  

                                                                                                                                                                         



a final judgment to this effect.  Valdez now appeals.  

                                                                                              



III.          STANDARD OF REVIEW  

                                                       



                            When  reviewing  the  validity  of  a  regulation,  in  the  absence  of  any  

                                                                                                                                                                               



contention  that  the  agency  failed  to  comply  with  the  required  procedures  for  

                                                                                                                                                                                



promulgation, we presume that it is valid and place the burden on the challenging party  

                                                                                                                                                                              

to  prove  otherwise.32  

                                                                                                                                                                                

                                                   We  consider  whether  the  regulation  is  "consistent  with  and  



                                                                                                                                                        

reasonably necessary to carry out the purposes of [its enabling statute] and whether [it  



              30            In addition to challenging the validity of the regulation, the municipalities                                                 



claimed that Revenue impermissibly denies the municipalities the ability to participate                                                                           

in taxability appeals in which they have a direct interest.                                                                     Finally they claimed that                       

Revenue improperly treats the dockets of taxability appeals as "taxpayer confidential"   

and asserted that they and the public have a right of access to the dockets of such                                                                                           

proceedings.   



              31            The  court's  order  also  granted  the  requested  declaration  that  affected  

                                                                                                                                                                      

municipalities have the right to participate in taxability appeals before Revenue and  

                                                                                                                                                                                

denied without prejudice the intervenors' request for a declaration for public access to  

                                                                                                                                                                     

appeals.  

                    



              32            See Grunert v. State, 109 P.3d 924, 928-29 (Alaska 2005) (citing Lakosh  

                                                                                                                                                                         

v. Alaska Dep't of Envtl. Conservation , 49 P.3d 1111, 1114 (Alaska 2002)).  

                                                                                                                                                   



                                                                                         -8-                                                                                 7100
  


----------------------- Page 9-----------------------

                                                                     33  

is] reasonable and                      not arbitrary."                     " '[R]easonable necessity                              is not a requirement       



separate from consistency' and the scope of review should center around consistency                                                                   

                                                          34   A regulation's consistency with its enabling statute is a  

with the authorizing statute."                                                                                                                                              



question of law to which we apply "the appropriate standard of review based on the level  

                                                                                                                                                                    

of agency expertise involved."35  

                                                                   



                           If the issue involves agency expertise or the determination of fundamental  

                                                                                                                                                     



policy questions on subjects committed to the agency's discretion, reasonable basis  

                                                                                                                                                                   

review applies.36   In applying reasonable basis review, we seek "to determine whether  

                                                             



the agency's decision is supported by the facts and has a reasonable basis in law, even  

                                                                                                                                                                    

if we may not agree with the agency's ultimate determination."37  

                                                                                                                                     



                           If no agency expertise is involved in the agency's interpretation, we apply  

                                                                                                                                                                   

                                                                                   38       Under  this  standard,  we  exercise  our  

the  substitution  of  judgment  standard.                                                                                                                            

                                          



independent  judgment,  substituting  it  "for  that  of  the  agency  even  if  the  agency's  

                                                                                                                                                           



             33            State, Dep't of Health & Soc. Servs., Div. of Pub. Assistance v. Gross                                                                  , 347   



P.3d 116, 121 (Alaska 2015) (quoting                                       Lakosh, 49 P.3d at 1114 (alterations omitted));                                             see  

also  AS 44.62.030.                      



             34            Id. at 121 n.25 (quoting Bd. of Trade, Inc. v. State, Dep't of Labor, Wage  

                                                                                                                                                                  

& Hour Admin., 968 P.2d 86, 89 (Alaska 1998)).  

                                                                                                    



             35            Davis Wright Tremaine LLP v. State, Dep't of Admin., 324 P.3d 293, 299  

                                                                                                                                                                      

(Alaska 2014).  

                                



             36            See Marathon Oil Co. v. State, Dep't of Nat. Res., 254 P.3d 1078, 1082  

                                                                                                                                                                   

(Alaska 2011).  

                  



             37            Davis Wright, 324 P.3d at 299 (quoting Tesoro Alaska Petroleum Co. v.  

                                                                                                                                                                          

Kenai Pipe Line Co., 746 P.2d 896, 903 (Alaska 1987)).  

                                                                                                                   



             38            Marathon Oil, 254 P.3d at 1082.  

                                                                                              



                                                                                    -9-                                                                            7100
  


----------------------- Page 10-----------------------

                                                                                      39  

[interpretation] ha[s] a reasonable basis in law."                                         We will adopt "the rule of law that is                          



most persuasive in light of precedent, reason, and policy, but in doing so we give due                                                                 



deliberative   weight   'to   what   the   agency   has   done,   especially   where   the   agency  



                                                           40  

interpretation is longstanding.' "                              



                        The parties disagree whether this regulation implicates agency expertise or  

                                                                                                                                                           



fundamental agency policy, and thus disagree whether reasonable basis or substitution  

                                                                                                                                         



of judgment review applies.  They also disagree whether Revenue's interpretation is  

                                                                                                                                                           



longstanding.  We conclude that this regulation does not implicate Revenue's expertise  

                                                                                                                                              



or fundamental policies and thus apply the substitution of judgment standard in assessing  

                                                                                                                                             



the validity of Revenue's interpretation of the statute.  

                                                                                                    



                        In  upholding  the  validity  of  the  regulation  the  superior  court  applied  

                                                                                                                                                



reasonable basis review, citing Revenue's "expertise regarding the most efficacious  

                                                                                                                                          



forum[for taxability appeals] in terms of staff and year-round availability, SARB's work  

                                                                                                                                                     



load, the advantages of formal motion practice and discovery in . . . taxability versus  

                                                                                                                              



valuation appeals, and any need for rapid decision as to both genres of appeals."  But if  

                                                                                                                                                           



the subjects that the superior court characterized as within Revenue's expertise were  

                                                                                                                                                     



sufficient for reasonable basis review to apply, then substitution of judgment review  

                                                                                                                                                 



would almost never apply because an agency will nearly always be more knowledgeable  

                                                                                                                                   



about its internal administrative functioning and capacity than a court.  But Revenue's  

                                                                                                                                           



expertise is in tax policy, not relative efficacy of forums or procedural needs.  

                                                                                                                                              



                        In determining which standard of review applies to this regulation we must  

                                                                                                                                                      



precisely identify the statutory term the regulation is interpreting.  We have previously  

                                                                                                                                           



            39           Tesoro Alaska             , 746 P.2d at 903.         



            40          Heller v. State, Dep't of Revenue, 314 P.3d 69, 73 (Alaska 2013) (quoting  

                                                                                                                                               

Chugach Elec. Ass'n v. Regulatory Comm'n of Alaska, 49 P.3d 246, 249-50 (Alaska  

                                                                                                                                                

2002)).  

               



                                                                           -10-                                                                     7100
  


----------------------- Page 11-----------------------

held that the substitution of judgment standard applies when reviewing an agency's                                                     



                                                                                    41  

interpretation of "non-technical statutory terms."                                                                                                  

                                                                                         This is because "mere familiarity in  



                                                                                     

. . . application [of these terms] by the [agency] does not render that agency any better  

                                                                                                        42  Examples of such terms  

able to discern the intent of the legislature than the courts." 

we have deemed to be non-technical include "adjacent to,"43  "local authorized planning  

                                                                                                                                        

agencies,"44           "disposal,"45           "interest  in  land,"46                and  "revocable."47                   Here  the  term  

                                                                                                                                              



"assessment" is commonly used by the general publicandthus conforms with these other  

                                                                                                                                               



terms that we have previously found to be non-technical terms and matters of pure  

                                                                                                                                               

statutory construction.48                   Further we have also stated that the substitution of judgment  

                                                                                                                                       



standard is appropriate where the case concerns "analysis of legal relationships about  

                                                                                                                                             

which  the  courts  have  specialized  knowledge  and  experience."49                                                    Here  Revenue's  

                                                                                                                                    



            41         N.  Alaska  Envtl.  Ctr.  v.  State,  Dep't  of  Nat.  Res.,  2  P.3d  629,  633  (Alaska  



2000).   



            42         Id.  at  634  (quoting  State  v.  Aleut  Corp.,  541  P.2d  730,  737  (Alaska  1975)).   



            43         Aleut  Corp.,  541  P.2d  at  736.   



            44         Id.  at  737-38.   



            45         N.  Alaska  Envtl.  Ctr.,  2  P.3d  at  633.  



            46         Id.  



            47         Id.   



            48         Cf.  State,  Dep't  of  Revenue  v.  OSG  Bulk  Ships,  Inc.,  961  P.2d  399,  403  n.6  



(Alaska   1998)   (holding   that   the   construction   of   a   tax   statute   was   "a   matter   of   pure  

statutory   construction   which   is   not   within   the   particular   expertise   of   [Revenue]   and  

which  requires  us  to  exercise  our  independent  judgment").   



            49         Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903  

                                                                                             

(Alaska 1987) (quoting Earth Res. v. State, Dep't of Revenue, 665 P.2d 960, 965 (Alaska  

                                                                                                                                          

                                                                                                                               (continued...)  



                                                                        -11-                                                                  7100
  


----------------------- Page 12-----------------------

interpretation of the term "assessment" implicates such a legal relationship:  the scope     



 of Revenue's jurisdiction in relation to that of SARB.                                            Because this case involves both                   



 statutory interpretation of a non-technical statutory term, a task in which courts are well                                                          

             50   and the question of the scope of and relationship between Revenue's and  

versed,                                                                                                                                               

 SARB's jurisdictions,51  we will apply substitution of judgment review in considering  

                                                                                                                                        



whether Revenue's interpretation of AS 43.56 through its regulation is consistent with  

                                                                                                                                                     



the statute.  

                      



                        We  also  may  in  some  circumstances  give  more  deference  to  agency  

                                                                                                                                               

interpretations  that  are  "longstanding  and  continuous."52                                                    The  State  argues  that  

                                                                                                                                                     



Revenue's interpretation is entitled to our deference due to its longstanding nature.  

                                                                                                                                                               



Revenue first promulgated this regulation in 1986 and amended it in 2003 to afford  

                                                                                                                                                  



municipalities the right to appeal taxability determinations.  It has thus existed in its  

                                                                                                                                                         



 current form for 12 years and has twice been the subject of public notice and comment,  

                                                                                                                                           

 as part of the required process for promulgating regulations.53  

                                                                                         



                        But the application of this regulation has not been consistent.  After the  

                                                                                                                                                       



regulation was promulgated, SARB, an independent entity from Revenue, continued to  

                                                                                                                                                          



            49           (...continued)  



                

 1983)).  



            50           Grunert v. State, 109 P.3d 924, 929 (Alaska 2005) (stating that the task of  

                                                                                                                                                         

 statutory interpretation is "a function uniquely within the competence of the courts").  

                                                                                                                                                            



            51           Cf.   McCaffery   v.   Green,   931   P.2d   407,   408   n.3   (Alaska   1997)  

                                                                                                                                                

 ("Jurisdictional  issues  are  questions  of  law  subject  to  this  court's  independent  

                                                                                                                                     

judgment.").  

                         



            52          Premera BlueCross v. State, Dep't of Commerce, Cmty. &Econ. Dev., Div.  

                                                                                                                                                      

of Ins., 171 P.3d 1110, 1119 (Alaska 2007).  

                                                                     



            53          See AS 44.62.190-.215.  

                                        



                                                                           -12-                                                                    7100
  


----------------------- Page 13-----------------------

hear   taxability   appeals   from   oil   and   gas   property   assessments.    SARB   decided   a  



                                                                                                        54  

taxability appeal regarding TAPS property as recently as 2008.                                                                         

                                                                                                             It was not until the  



                                                                                                                              

following year that SARB asserted that under 15 AAC 56.015, it had no role in taxability  



                                                                                                                                    

appeals  and  would  not  hear  them unless  the  municipalities  "prevail[ed]  in  a  court  



                                                                                                                              

challengeto thevalidity oftheregulations thatgive[Revenue]jurisdiction over taxability  

            55     Given  the  relatively  recent  conflicting  actions  of  Revenue  and  SARB,  

issues."                                                                                                                        



Revenue's  interpretation  is  not  entitled  to  the  additional  deference  that  we  afford  

                                                                                                                                  



longstanding and continuous interpretations.  

                                                 



                      In applyingsubstitution ofjudgmentreview, weinterpret thestatuteat issue  

                                                                                                                                     

de novo.56   When construing statutes de novo, we consider three factors:  "the language  

                                                                                                                              

of the statute, the legislative history, and the legislative purpose behind the statute."57  

                                                                                                                                              

We "decide questions of statutory interpretation on a sliding scale"58 :  "the plainer the  

                                                                                     



           54         Trans-Alaska Pipeline Sys.                 , OAH No. 08-SARB-TAX at 18-19 (May 30,                                



2008),          http://aws.state.ak.us/officeofadminhearings/Documents/TAX/PROP/  

TAX08SARB%20TAPS.pdf.   



           55        Appeal from the 2009 Assessment , OAH No. 09-SARB-TAX at 2 (May 21,  

                                                                                                                                        

2009) (order staying appeal).  

                                                 



           56         See Marathon Oil Co. v. State, Dep't of Nat. Res., 254 P.3d 1078, 1082  

                                                                                                                                    

(Alaska 2011) ("We apply the [substitution of] judgment standard, under which 'the  

                                                                                                                                      

court makes its own interpretation of the statute at issue . . . .' " (quoting Matanuska- 

                                                                                                                         

Susitna Borough v. Hammond, 726 P.2d 166, 175 (Alaska 1986))).  

                                                                                                               



           57         Oels v. Anchorage Police Dep't Emps. Ass'n, 279 P.3d 589, 595 (Alaska  

                                                                                                                                

2012) (quoting Shehata v. Salvation Army, 225 P.3d 1106, 1114 (Alaska 2010)).  

                                                                                                                                    



           58        Marathon Oil Co ., 254 P.3d at 1082.  

                                                                         



                                                                   -13-                                                             7100
  


----------------------- Page 14-----------------------

language of the statute, the more convincing any contrary legislative history must be . . . .                                                                          

to overcome the statute's plain meaning."                                        59  



IV.          DISCUSSION  



                                                                                                                     60  

                                                                                                                                                       

                                                                                                                          Subsection (a) provides  

                          Revenue promulgated 15 AAC 56.015 in 1986. 



                                                                                                                  61  

                                                                                                                                                                  

for appeals of "the assessed value of [oil and gas] property":                                                         the property owner or the  



                                                                                                                                                          

relevant municipality may file an appeal with Revenue "as provided in 15 AAC 56.020  



                                                                    62  

                                                                                                                                                                  

or 15 AAC 56.047, as applicable."                                         Those regulations in turn set procedures for the  



                                                                                                                                                                    63  

                                                                                                                                                                         

appeal and provide that Revenue's decision on the appeal may be appealed to SARB. 



                                                                                                                                                      

Subsections (b) and (c) set taxability appeals on a separate procedural route:  property  



                                                                                                                                                            

owners and municipalities challenging a taxability determination must appeal under  



                                                                                       64  

                                                                                                                                                   

                                                                                              Those regulations contain Revenue's  

 15 AAC 05.001-.050, not 15 AAC 56.020. 



                                                                                                                                                            

general hearing procedures, and provide that Revenue's decision on the taxability appeal  



                                                                                                           65  

                                                                                                                                                                   

may be appealed to a formal hearing before Revenue.                                                              They do not provide for an  



                    

appeal to SARB.  



             59           Peninsula Mktg. Ass'n v. State                             , 817 P.2d 917, 922 (Alaska 1991).                                    



             60  

                                                                                                                                                               

                          Theregulationlists AS43.05.010, .080, and .260, AS43.56.110-.130, .140,  

and .200 as its statutory authority.                                15 AAC 56.015.     



             61           15  AAC  56.015(a).  



             62           Id.  



             63           15  AAC  56.020,  .030(a),  and  .047(d).  



             64           15   AAC   56.015(b)-(c).     Subsection   (d)  also   directs   property   owners  



appealing  "a  statement  of  the  amount  of  tax  or  penalty  due"  to   15  AAC  05.001-.050.   

 15  AAC  56.015(d).  



             65           15 AAC 05.001, .030, and .040.  

                                                                               



                                                                                -14-                                                                          7100
  


----------------------- Page 15-----------------------

                             Valdez challenges subsections (b) through (d) of this regulation.                                                                            Alaska  



Statutes 43.56.110-.130 provide that SARB shall hear administrative appeals of all                                                                                                  

                                                                                    66 through this regulation, Revenue has therefore  

"assessment[s]" of oil and gas property;                                                                                                                               



interpreted "assessment" in AS 43.56 to include only the valuation of taxable oil and gas  

                                                                                                                                                                                    



property,and not Revenue's initial determination oftaxability. In contrast Valdezargues  

                                                                                                                                                                             



that "assessment" encompasses the determination of whether property is taxable under  

                                                                                                                                                                              



AS 43.56, because that determination is made by Revenue in the initial stages of the  

                                                                                                                                                                                   



assessment process.   Valdez concludes that appeals of taxability determinations are  

                                                                                                                                                                                   



therefore  committed  to  SARB's  jurisdiction  by  statute,  and  that  15  AAC  56.015  

                                                                                                                                                                          



impermissibly removes those appeals from SARB's jurisdiction.  

                                                                                                                                             



                             In order to determine whether Revenue's interpretation is consistent with  

                                                                                                                                                                                 



AS 43.56, it is first necessary to independently interpret AS 43.56 using our three metrics  

                                                                                                                                                                           

for statutory interpretation:  text, legislative history, and purpose.67   This is the first time  

                                                                                                                                                                                 



we have been squarely presented with the question of the scope of the term "assessment"  

                                                                                                                                                              



in AS 43.56.  In a pair of prior decisions on other issues associated with AS 43.56, we  

                                                                                                                                                                                    

appeared to use the term "assessment" as referring to value.68   But this prior usage is not  

                                                                                                                                                                                    



              66             AS 43.56.110(a) (property owners and municipalities "may object to [an]                                                                              



assessment"); AS 43.56.120(a) ("After a ruling by [Revenue] on an appeal made under                                                                                           

AS   43.56.110,   the   owner   or   a   municipality   may   further   appeal  to  [SARB].");  

AS 43.56.130(a) ("[SARB] shall hear appeals filed under AS 43.56.120(a).").                                                           



              67             See  Oels  v.  Anchorage  Police  Dep't  Emps.  Ass'n,  279  P.3d  589,  595  

                                                                                                                                                                                 

(Alaska 2012).  

                   



              68             See State, Dep't of Revenue v. BP Pipelines (Alaska) Inc., 354 P.3d 1053,  

                                                                                                                                                                              

 1056 (Alaska 2015) ("Under Alaska law . . . only [Revenue] may assess the value of [oil  

                                                                                                                                                                                   

and gas] property. . . . A party may appeal [Revenue's] valuation to [SARB]." (emphasis  

                                                                                                                                                                     

added)); BP Pipelines (Alaska) Inc. v. State, Dep't of Revenue, 325 P.3d 478, 480  

                                                                                                                                                                                 

(Alaska 2014) ("[Revenue] assesses the 'full and true value' of [oil and gas] property.  

                                                                                                                                                                                            

                                                                                                                                                             (continued...)  



                                                                                         -15-                                                                                  7100
  


----------------------- Page 16-----------------------

binding on the question now before us because in both prior cases the only issues                                                       



                                                         69  

presented were those of valuation,                                                                                                             

                                                             so we had no need to distinguish between issues of  



                                                                                                                

                                                                                                                                            

                                                                                                              Accordingly, we will  

valuation and issues of taxability for the purposes of assessments.  



                                                                                                                                              

proceed by individually examining each of the three statutory interpretation metrics: the  



                                                                               

statute's text, legislative history, and purpose.  



                                                                                                                                               

           A.	        Revenue's Interpretation Of "Assessment" Through Its Regulation Is  

                                                                                           

                      Not Consistent With The Text Of AS 43.56.  



                                                                                                       70  

                                                                                                                                             

                       "Interpretation of a statute begins with its text."                                 But AS 43.56 does not  



                                                 71  

                                                                                                                                     

define the term "assessment."                        And AS 43.56's plain text does not distinguish between  



                                                                                                                                         

appeals involving valuation and appeals involving taxability.   As the superior court  



                                                                                                                                               72  

                                                                                                                                                    

recognized, "[t]he only explicit appellate path specified in AS 43.56 is through SARB." 



                                                                                                                               

Whether  the  text  of  AS  43.56  is  flexible  enough  to  accommodate  Revenue's  



                                                                                                                                          

interpretation  through  its  regulation  depends  on  the  scope  of  the  statutory  term  



                         

"assessment."  



           68          (...continued)  



                                                                                                                                      

Alaska  Statute  43.56.060  controls  [Revenue's]  assessment.  A  party  may  appeal  

                                                                                                                                     

[Revenue's] valuation to . . . [SARB]." (emphasis added) (footnote omitted)).  



           69	        See BP Pipelines, 354 P.3d at 1055; BP Pipelines, 325 P.3d at 480.  

                                                                                                                                          



           70          City of Kenai v. Friends of the Recreation Ctr., Inc., 129 P.3d 452, 458-59  

                                                                                                                                       

(Alaska 2006) (citing Bartley v. State, Dep't of Admin., Teachers Ret. Bd., 110 P.3d  

                                                                                                                                          

 1254, 1258 (Alaska 2005)).  

                                                 



           71         See AS 43.56.210 (providing definitions of terms used in the chapter, but  

                                                                                                                                             

not defining "assessment").  

                                                



           72         See AS 43.56.120.  

                                     



                                                                     -16-	                                                               7100
  


----------------------- Page 17-----------------------

                            1.            The text of the overall statutory scheme                                



                            Because the term "assessment" is used throughout AS 43.56's statutory                                                                 



scheme, an outline of the language set forth in the statutory scheme will prove helpful                                       



here:  



                            (1) Alaska Statute 43.56.060 provides standards for the assessment and                                                                           



taxation of oil and gas property.                                    Subsections (a) and (b) mandate that Revenue "shall                                                



                                    73  

assess   property."                                                                                                                                                          

                                            Subsections  (c)  through  (f)  then  set  out  the  standards  for  the  



                                           

valuation of oil and gas property.  But these subsections describe the proper valuation  



                                               74  

                                                                                                                                                                  

of "taxable property,"                              rather than simply "property."   This distinction - Revenue  



                                                                                                                                                                             

assesses  all  property  but  then  only  values  taxable  property  -  indicates  that  the  



                                                                                                                                                                            

assessment  required  by  AS  43.56.060(a)  necessarily  includes  a  determination  that  

                                                                             75    The text of this section thus suggests that the  

                                                                                                                                                                              

                                                                

property is taxable under AS 43.56. 



taxability determination is a component of the assessment process, not a determination  

                                                                                                                                                       



that precedes the process.  

                                                       



                            (2)  Alaska Statute  43.56.090 requires Revenue to prepare annually an  

                                                                                                                                                                               



assessment roll containing three things:  "a description of all taxable property; . . . the  

                                                                                                                                                                            



assessed value of all taxable property; [and] . . . the names and addresses of persons  

                                                                                                                                                                    



owning  property  subject  to  assessment  and  taxation."                                                               The  first  component  of  the  

                                                                                                                                                                             



              73            AS  43.56.060(a)  &  (b).   



              74            AS  43.56.060(c)-(f)  (emphasis  added).   



              75            This  distinction  appears  elsewhere  in  the  statute  as  well,  indicating  that  it  



is  not   simply  a  drafting  error.   For  example,  Revenue  "may  make  an  investigation  of  

property on which a return has been filed or of taxable  property upon which no return  

has  been filed."  AS 43.46.080(a).  And AS 43.56.210(5) specifically defines "taxable  

property,"  suggesting  that  the  legislature  specifically  used  that  term  throughout  when  it  

meant  to  refer  only  to  property  taxable  under  the  statute.  



                                                                                      -17-                                                                                7100
  


----------------------- Page 18-----------------------

assessment   roll,   "a   description   of   all   taxable   property,"   necessarily   involves   a  



determination by Revenue that the property described is taxable under AS 43.56.  The                                         



statutory   scheme   defines   what   constitutes   taxable   property   under   AS   43.56   and  



specifically enumerates certain types of property that are and are not included in the                                                     

                                                    76    Thus in  order  to  prepare the statutorily  mandated  

definition   of taxable property.                                                                                               



assessment roll, Revenue must make an initial determination that property fits within the  

                                                                                                                                            



statutory definition of taxable oil and gas property and is not exempted from taxation.  

                                                                                                                                                  



And, as discussed above, that determination is a part of the assessment process.  

                                                                                                                                      



                      (3) Under AS 43.56.100, Revenue must annually "send to every owner of  

                                                                                                                                             



taxable property named in  the assessment roll a notice of assessment, showing the  

                                                                                                                                           



assessed value of the property" and must send "a copy of the notice of assessment on any  

                                                                                                                                           



taxable property that is assessed under [AS 43.56]" to each affected municipality.  This  

                                                                                                                                         



assessment notice thus serves as both notice of a property's assessed value and notice  

                                                                                                                                      



that the property has been determined taxable under AS 43.56, as the statute does not  

                                                                                                                                  



require that owners of property deemed not taxable under AS 43.56 receive any such  

                                                                                                                                         



assessment notice.  

                    



                      (4) Under AS 43.56.110, a property owner or municipality who receives  

                                                                                                                                   



such  an  assessment notice may appeal it "by  advising  [Revenue]  in writing  of the  

                                                                                                                                           

objections to the assessment within 20 days of the effective date of the notice."77   Upon  

                                                                                                                                       



a property owner's objection, Revenue is authorized to "adjust the assessment and the  

                                                                                                                                           

assessment roll."78              This subsection does not limit what an owner or municipality can  

                                                                                                                                           



appeal to Revenue - any objection to the assessment may be appealed.  By the plain  

                                                                                                                                        



                      AS 43.56.210(5).  

           76                                        

                



                      AS 43.56.110(a).  

           77                                        

                



                      AS 43.56.110(c).  

           78                

                



                                                                    -18-                                                               7100
  


----------------------- Page 19-----------------------

language of the statute, this includes the mere fact of the property's inclusion on the                                                                    



assessment roll, not only the dollar amount at which Revenue has valued the property.                                                                              



Revenue's remedial power is similarly broad, encompassing the power to adjust both the                                                                      

                                                                   79    Thus, if a property owner or municipality can  

assessment and the assessment roll.                                                                                                                       



appeal  the  inclusion  of  property  on  the  assessment  roll,  Revenue  may  remove  the  

                                                                                                                                                           



property from the roll altogether if it agrees that the property is not taxable; its power is  

                                                                                                                                                              



not limited to adjusting the valuation of the property.  

                                                                                  



                         (5) Alaska Statute 43.56.120 provides that "[a]fter a ruling by [Revenue]  

                                                                                                                        



on an appeal made under AS 43.56.110, the owner or a municipality may further appeal  

                                                                                                                                                     



to [SARB]." This section is simple and unequivocal: whatever was appealed to Revenue  

                                                                                                                                                 



under AS 43.56.110 can be further appealed to SARB.  And, as previously noted, under  

                                                                                                                                                       



AS 43.56.110 the property owner can object to any aspect of the assessment notice and  

                                                                                                                                                           



Revenue must rule on this objection.  

                                                   



                         (6)  Alaska  Statute  43.56.130  further  underscores  the  broad  scope  of  

                                                                                                                                                            



SARB's jurisdiction established by AS 43.56.120.  This section establishes procedures  

                                                                                                                                             



for hearings before SARB and mandates that SARB "shall  hear appeals filed under  

                                                                                                                                                      

AS 43.56.120(a)."80                    The use of the mandatory "shall" indicates that the legislature did  

                                                                                                                                                           



not intend to grant SARB or Revenue the discretion to categorically remove a class of  



appeals from SARB's jurisdiction.  

                                                                  



                         (7)  Alaska  Statute  43.56.130(f)  provides  that  SARB  may  adjust  a  

                                                                                                                                                                   



property's assessed value only upon "proof of unequal, excessive, or improper valuation  

                                                                                                                                                



or valuation not determined in accordance with the standards set out in [AS 43.56]." But  

                                                                                                                                                           



            79           Id .  



            80           AS  43.56.130(a)  (emphasis  added).  

                 



                                                                             -19-                                                                            7100  


----------------------- Page 20-----------------------

 simply because the legislature limited the grounds upon which SARB could adjust a                                                                                                                                                  



property's assessed value does not indicate that it intended to limit SARB's role solely                                                                                                                               



to adjustments of value.                                           Such an interpretation of AS 43.56.130(f) would contradict                                                                               



AS 43.56.130(a)'s simple and explicit command that SARB "shall hear appeals filed                                                                                                                                          

                                                                 81  Moreover apropertythat Revenuehas incorrectly determined  

under AS43.56.120(a)."                                                                                                                                                                                    



is taxable has certainly been "improper[ly] valu[ed]," so AS 43.56.130(f) expressly  

                                                                                                                                                                                                             



permits SARB to address issues of taxability.  Indeed this is how SARB interpreted the  

                                                                                                                                                                                                                               

grant of jurisdiction for many years before Revenue promulgated 15 AAC 56.015.82  

                                                                                                                                                                                                        



                                    (8) Finally, AS 43.56.135 mandates that Revenue "shall certify the final  

                                                                                                                                                                                                                           



assessment roll and mail . . . a statement of the amount of tax due" to each owner of  

                                                                                                                                                                                                                                 



taxable property by June 1 of each year. This requirement implies that all issues relating  

                                                                                                                                                                                                                   



to the assessment roll must be resolved at the administrative level by June 1 of each year.  

                                                                                                                                                                                                                                          



This requirement must encompass taxability appeals, because an assessment roll is not  

                                                                                                                                                                                                                               



final if it still contains property whose owners are disputing its taxability in appeal  

                                                                                                                                                                                                                     



proceedings before Revenue.  Allowing taxability appeals at the administrative level to  

                                                                                                                                                                                                                                  



extend beyond June 1, as taxability appeals before Revenue currently do, contravenes  

                                                                                                                                                                                             



                  81                See Estate of Kim ex rel. Alexander v. Coxe                                                                            , 295 P.3d 380, 386 (Alaska                            



2013) ("When interpreting statutes, 'we must, whenever possible, interpret each part or                                                                                                                                           

section   of   a   statute   with   every   other   part   or   section,   so   as   to   create   a   harmonious  

whole.'   " (quoting                                  State,   Dep't of Commerce,                                                 Cmty.   & Econ. Dev.,                                        Div. of Ins.                       v.  

Progressive Cas. Ins. Co.                                            , 165 P.3d 624, 629 (Alaska 2007))).                                                                



                  82                See, e.g., Alascom Inc. at 11 (State Assessment Review Bd. Mar. 31, 1981)  

                                                                                                                                                                                                                        

(concluding that Revenue's assessment of a segment of a telecommunications system  

                                                                                                                                                                                                                    

"was improper for failure to meet the definition of taxable property" under AS 43.56).  

                                                                                                                                                                                                                                          



                                                                                                              -20-                                                                                                        7100
  


----------------------- Page 21-----------------------

this clear statutory requirement because if an administrative taxability appeal were later                                                                                                                       



 successful, the assessment roll would then have to be altered after June 1, in direct                                                                                                                       



tension with this statutory prescription.                           



                                  2.               Common usage of the term "assessment"                                                                            



                                  When interpreting a statute, we construe its language " 'in accordance with                                                                                                    



 [its] common usage,' unless the word or phrase in question has 'acquired a peculiar                                                                                                                 



                                                                                                                                                                                83  

meaning, by virtue of statutory definition or judicial construction.' "                                                                                                                         

                                                                                                                                                                                       As mentioned  



                                                                                                                                                                                     

earlier, the term "assessment" is not defined in AS 43.56, and we have not ruled on its  



                                                                                                                                                                                                                       84  

                                                                                                                                                                                                                              

meaning. Nor is "assessment" defined in AS 29.45, which governs municipal taxation. 



                                                                                                                                                                                                               

A diligent search  of the Alaska Statutes reveals there is no definition for  the term  



                                                                                                                                                                                 

"assessment" in the context of property taxation in the entirety of the code.  



                                                                                                                                                                                                      

                                  But we can also rely on both dictionaries and texts in the field of property  



                                                                                                                                                            85  

                                                                                                                                                                                                         

assessment in order to ascertain the meaning of "assessment."                                                                                                      The edition of Black's  



                                                                                                                                                                                                             

Law Dictionary  in existence at the time of the drafting and enactment of AS 43.56  



                                                                                                                                                                                                            

defines "assessment" generally as "the process of ascertaining and adjusting the shares  



                                                                                                                                                                                                            

respectively to be contributed by several persons towards a common beneficial object  



                 83               Municipality of Anchorage v. Suzuki                                                             , 41 P.3d 147, 150 (Alaska 2002)                                          



(alteration in original) (quoting  Muller v. BP Exploration (Alaska) Inc., 923 P.2d 783,   

788 (Alaska 1996)).              



                 84               See AS 29.45.  

                                                                        



                 85               See Alaskans for Efficient Gov't, Inc. v. Knowles, 91 P.3d 273, 276 n.4  

                                                                                                                                                                                                       

(Alaska  2004)  ("Dictionaries  provide  a  useful  starting  point  for  determining  what  

                                                                                                                                                                                                              

 statutory terms mean, as they provide the common and ordinary meaning of words.");  

                                                                                                                                              

Parris-Eastlake v. State, Dep't of Law, 26 P.3d 1099, 1103 (Alaska 2001) (consulting  

                                                                                                                          

a treatise in order to ascertain the scope of a statutory term).  

                                                                                                                                                          



                                                                                                         -21-                                                                                                  7100
  


----------------------- Page 22-----------------------

                                                             86  

according to the benefit received."                              And it defines "assessment" specifically for the                                



purposes of property taxation as "[t]he                            listing  and valuation of property for the purpose                    

                                                      87   Both definitions contemplate the scope of the term  

of apportioning a tax upon it."                                                                                                               



"assessment" as including not just the assigning of value to a piece of property but also  

                                                                                                                                               



the initial identification of that property as eligible for taxation.  

                                                                                                               



                       Texts written by those who work in the field of property assessment also  

                                                                                   



consider a determination of taxability to be an integral component of "assessment."  As  

                                                                                                                                                  



the superior court noted in its order, "[d]eterminations that property is taxable [are] a  

                                                                                                                                                    



necessary step routinely undertaken by municipal boards of tax equalization nationwide  

                                                                                                                                   



as  reflected  in  standard  texts  on  assessment  processes."                                              One  such  text  defines  

                                                                                                                                         



"assessment" with respect to property taxation as "the official act of discovering, listing,  

                                                                                                                                           



and appraising property, whether performed by an assessor, a board of review, or a  

                                                                                                                                                    

court."88         Another text describing the assessment process and the tasks of assessors  

                                                                                                                                      



includes the initial step in the process of "[l]ocating and identifying all taxable property  

                                                                                                                                        

in  the  jurisdiction."89                 These  definitions  indicate  that  "assessment,"  as  the  term  is  

                                                                                                                                                   



commonly used, includes the step of an initial determination that a property is taxable.  

                                                                                                                                         



            86         Assessment ,   BLACK 'S  LAW  DICTIONARY   (rev.   4th   ed.   1968)   (emphasis  



added).  



            87         Id.  (emphasis  added).   



            88         INT 'L      ASSOC.          OF     ASSESSING             OFFICERS,           GLOSSARY              FOR      PROPERTY  



APPRAISAL AND  ASSESSMENT   11  (2d  ed.  2013)  (emphasis  added).  



            89         INT 'L    ASSOC.            OF    ASSESSING             OFFICERS,           PROPERTY    APPRAISAL    AND  



ASSESSMENT  ADMINISTRATION   18  (Joseph  K.  Eckert  ed.,1990)   



                                                                       -22-                                                                  7100
  


----------------------- Page 23-----------------------

                             3.             The significant consequences of Revenue's interpretation                                              



                             By   bifurcating   the   review   process   for   valuation   appeals   from that                                                                          for  



taxability appeals, Revenue's interpretation of the statute changes the standard of review                                                                                       



that the superior court affords to the administrative decision below on the issue of                                                                                                      



taxability.  The statute explicitly affords a property owner or municipality appealing a  



                                                                                                                                                  90  

decision by SARB a right to a trial de novo in the superior court.                                                                                                            

                                                                                                                                                        We have rejected  



                                                                                                                                                                                         

attempts by the superior court to limit the scope of discovery in such appeals, and we  



                                                                                                                                                                               

have interpreted the right to a trial de novo on appeal from SARB decisions to include  



                                                                                                                                     91  

                                                                                                                                                                                      

the standard discovery rights under the Alaska Civil Rules.                                                                                 The trial de novo thus  



                                                                                                                                                                        

affords the appealing property owner or municipality an opportunity for full discovery,  



                                                                                                                                                                                                 

motions practice, and time to resolve any objections it has to SARB's determinations.  



                                                                                                                                                                                   

And if the superior court's decision is further appealed to this court after a trial de novo,  



                                                                                                                                                     92  

                                                                                                                                                          

we review only the superior court's decision, not SARB's decision. 



                             In   contrast,   under   Revenue's   interpretation,   a   property   owner   or  

                                                                                                                                                                      



municipality appealing a taxability decision by Revenue to the superior court has no such  

                                                                                                                                                                                      



statutory right to a trial de novo.  Rather they are limited to an administrative appeal in  

                                                                                                                                                                                           



               90            AS 43.56.130(i).                        



               91            See Fairbanks N. Star Borough v. BP Pipelines (Alaska) Inc., No. S-13150  

                                                                                                                                                                             

(Alaska Supreme Court Order, Aug. 27, 2008).  

                                                                                                          



               92            See BP Pipelines (Alaska) Inc. v. State, Dep't of Revenue, 325 P.3d 478,  

                                                                                                                                                                                     

482 (Alaska 2014).  

                             



                                                                                           -23-                                                                                     7100
  


----------------------- Page 24-----------------------

which the decision to grant a trial de novo is left to the discretion of the superior court                                    



            93                                                                                                                                                    94  

judge.                                                                                                                                        

                 We have stated that such discretionary de novo review "is rarely warranted" 

                                                                                                                                                      95   If the  

 and is generally limited to review of due process violations at the agency level.                                                                              

                                                                                                                                            



property owner or municipality is not granted a discretionary trial de novo on a taxability  

                                                                                                                                                   



 claim, the superior court's review of Revenue's decision will be limited to the record on  

                                                                                                                                                                 

 file with Revenue and will be deferential to Revenue's findings.96                                                                  It is unlikely the  

                                                                                                                                                                



 legislaturewould haveintended for theseseriousconsequences to arisefromadistinction  

                                                                                                                                                  



not provided for in the text of the statute, and we are accordingly wary of adopting  

                                                                                                                                                     



Revenue's interpretation.  

                       



                          While AS 43.56's plain text is silent on the scope of the term "assessment,"  

                                                                                                                                            



the text of the overall statutory scheme, the common usage of the term "assessment" in  

                                                                                                                                                                  



the   property   taxation   context,   and   the   significant   consequences   of   Revenue's  

                                                                                                                                                



 interpretation of the statute lead us to conclude that the statute's text indicates that  

                                                                                                                                                              



 "assessment" encompasses the initial taxability determination.  

                                                                                            



             93           Alaska R. App. P. 609(b)(1). We review the decision of the superior court                                                         



whether to grant a trial de novo under the very deferential abuse of discretion standard.                                                                              

SeeS.       AnchorageConcerned Coal., Inc. v.                                   MunicipalityofAnchorageBd.                                ofAdjustment              ,  

 172 P.3d 774, 778 (Alaska 2007) (citing                                      Christensen v. NCH Corp.                          , 956 P.2d 468, 473            

 (Alaska 1998)).   



             94           S. Anchorage Concerned Coal., 172 P.3d at 778.  

                                                                                                                         



             95           See  Pacifica  Marine,  Inc.  v.  Solomon  Gold.,  Inc.,  356  P.3d  780,  795  

                                                                                                                                                              

 (Alaska 2015).  

                 



             96           Alaska R. App. P. 604(b)(1)(A); see also Pacifica Marine, 356 P.3d at 795.  

                                                                                                                                                                       



                                                                               -24-                                                                         7100
  


----------------------- Page 25-----------------------

                 B.	             Revenue's Interpretation Of "Assessment" Through Its Regulation Is                                                                                                               

                                 Not Consistent With The Legislative History Of AS 43.56.                                                                                  



                                 "When interpreting a statute, we do not stop with the plain meaning of the                                                                                                    



text"; rather, "we apply a sliding scale approach, where '[t]he plainer the statutory                                                                                                           



language is, the more convincing the evidence of contrary legislative purpose or intent                                                                                                                  

must be.' "               97  



                                                                                                                                                                                              

                                 The legislative history of AS 43.56 lends some support to the indication  

                                                                                                                                                                                                              

found in the plain text that Revenue's determination of the taxability of oil and gas  



                                                                                                                                                                                                             

property is part and parcel of the assessment process.  The entirety of AS 43.56 was  



                                                                                                                                                                                       98 

                                                                                                                                                                                             In a letter  

adopted during the first special legislative session held in the fall of 1973. 



                                                                                                                                                                                                       

to the speaker of the house introducing the bill that would become codified at AS 43.56,  



                                                                                                                                                                                                           

then-Governor Egan explained that "[SARB] is created to serve the function of the local  



                                                                                                                                                                                                                   

board of equalization" and that "[t]he manner of assessment and collection of the tax is  



                                                                                                              99  

                                                                                                                                                                                                               

similar to that provided for municipalities."                                                                        Under AS 29.45, which establishes the  



                                                                                                                                                                                                           

manner in which municipalitiesassess andcollect tax, themunicipality'sgoverning body  



                                                                                                                                                                                                                 100  

                                                                                                                                                                                                                         

sits as a board of equalization when hearing appeals from municipal tax assessments. 



                 97              State, Commercial Fisheries Entry Comm'n v. Carlson                                                                                    , 270 P.3d 755, 762                   



(Alaska   2012)   (alteration   in   original)   (quoting   Gov't   Emps.   Ins.   Co.   v.   Graham- 

Gonzalez, 107 P.3d 279, 284 (Alaska 2005)).                                                                        



                 98              See Ch. 1, 1, FSSLA 1973.  

                                                                                          



                 99               1973 House Journal 41.  

                                                                                              



                                 AS 29.45.200(a).  

                 100	                      

                        



                                                                                                      -25-	                                                                                               7100
  


----------------------- Page 26-----------------------

These municipal boards of equalization routinely hear both valuation and taxability                                             

appeals.101  



                       The State notes that, while municipal boards of equalization do often hear  

                                                                                                                                         

                                                                                                                                    102  The  

taxability appeals, such appeals may also be brought directly to the superior court.                                                       

                                                                                                                            



 State  argues  that  because  municipal  boards  of  equalization  do  not  have  exclusive  

                                                                                                                                



jurisdiction over taxability appeals, neither should SARB be understood to have such  

                                                                                                                                         



exclusive  jurisdiction.                   But  municipal  boards  of  equalization  do  have  exclusive  

                                                                                                                                



jurisdiction over taxability appeals at the administrative level; the statute does grant  

                                                                                                                                       



property owners the right to appeal taxability determinations directly to the superior  

                                                                                                                                   



court, but grants the board of equalization exclusive jurisdiction over such appeals at the  

                                                                                                                                            



administrative level.  This is consistent with SARB having exclusive jurisdiction over  

                                                                                                                                         



taxability appeals at theadministrativelevel,afterRevenueissues aninformal conference  

                                                                                                                               



decision, and the statutory grant to property owners and municipalities of a right to  

                                                                                                                                             

appeal SARB's determination to the superior court for trial de novo.103  

                                                                                                         



                      Finally, the legislature, rather than contemplating a bifurcated process for  

                                                                                                                                            



AS 43.56 appeals when drafting the bill that would become AS 43.56, emphasized the  

                                                                                                                                           



virtue of condensing power to hear such appeals in a single entity.   The committee  

                                                                                                                              



                      See,  e.g.,  Ketchikan  Gateway  Borough  v.  Ketchikan  Indian Corp.,  

            101                                                                                                                       

                 

75 P.3d 1042, 1044 (Alaska 2003) (reviewing a decision of the borough's municipal  

                                                                                                                                

board of equalization determining that only 60 percent of a property was tax exempt);  

                                                                                                                    

N.  Slope Borough v. Puget Sound Tug & Barge, 598 P.2d 924, 926 (Alaska 1979)  

                                                                                                                                      

 (reviewing decision of the borough's board of equalization that sea vessels trapped in ice  

                                                                                                                                            

within the borough were subject to property taxes).  

                                                                                       



            102       See AS 29.45.200(c) ("[A] determination of the assessor as to whether  

                                                                                                                                   

property is taxable under law may be appealed directly to the superior court.").  

                                                                                                                                     



            103       See AS 43.56.130(i).  

                                    



                                                                     -26-                                                              7100
  


----------------------- Page 27-----------------------

drafting   the   bill   heard   extensive   testimony   on   the   need   for   a   uniform standard                                                                             for  



                                                                          104  

assessment of oil and gas property,                                                                                                                                            

                                                                                and ultimately created only a single entity to hear  



                                                                                                                                                                                    

appeals:   SARB.   It is exceedingly unlikely that the legislature intended to create a  



                                                                                                                                                                      

bifurcated  appeal  process  without  expressly  doing  so,  particularly  after  hearing  



                                                                                            

unrebutted testimony on the importance of uniformity.  



                                                                                                                                                                    

                            Thelegislativehistory behindSARB'screationis notparticularly extensive  



                                                                                                                                                                                  

but  it  does  reveal  that  the  legislature  modeled  SARB  after  municipal  boards  of  



                                                                                                                                                                     

equalization and was aware of the importance of a uniform assessment process overseen  



                                                                                                                                                                                   

by a single entity.  These factors are both inconsistent with Revenue's interpretation of  



                         

the statute.  



                                                                                                                                                                                         

              C.	           Revenue'sInterpretationOf"Assessment"IsNot Consistent With The  

                                                                

                            Purpose Of AS 43.56.  



                                                                                                                                                             

                            "The goal of statutory construction is to give effect to the legislature's  



                                                                                                                                                                                  105  

                                                                                                                                                                                         

intent, with due regard for the meaning the statutory language conveys to others." 



Accordingly, when engaging in statutory interpretation, we aim to "construe a statute in  

                                                                                                                                                                                    

light of its purpose."106  

                                                                                                                                                                     

                                                     We will discuss two indicia of what the legislature intended  



              104           See, e.g.         , Minutes, H. Fin. Comm. Hearing on H.B. 1, 8th Leg., 1st Special                                                         



Sess. (Oct. 22, 1973) (testimony of Homer L. Burrell, Director, Div. of Oil & Gas)                                                                                           

("[A]ssessment practices should be uniform throughout the state.");                                                                                id.  (testimony of  

Tom Brusard, Atlantic-Richfield Fiscal Tax Consultant) ("[T]he best way to [have some                                                                                        

uniform standard of assessment] [i]s to have a single entity to assess those standards.").                                                                   



              105            City of Fairbanks v. Amoco Chem. Co., 952 P.2d 1173, 1178 (Alaska 1998)  

                                                                                                                                                                            

(quoting  Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co.,  746 P.2d 896, 905  

                                                                                                                                                                               

(Alaska 1987)).  

                                   



              106           Alaskans for a Common Language, Inc. v. Kritz , 170 P.3d 183, 193 (Alaska  

                                                                                                                                                                       

2007).  

                



                                                                                       -27-	                                                                                 7100
  


----------------------- Page 28-----------------------

 "assessment" to mean in AS 43.56:                                                                             SARB decisions made nearly contemporaneously   



 with the enactment of AS 43.56 and the compressed timeline that the legislature set forth                                                                                                                                                                 



 in AS 43.56 for the resolution of appeals regarding assessments.                                                                                              



                                          1.                  Prior SARB decisions                      



                                         A   decision   by   SARB   nearly  contemporaneous   with   the   enactment   of  



 AS 43.56 provides further insight into the scope of the jurisdiction that the legislature                                                                                                                                               



 intended to grant SARB, and thereby the scope it intended the term "assessment" to                                                                                                                                                                                



                 107  

 have.                                                                                                                                                                                                                                              

                           In 1974, one year after the passage of AS 43.56 and the establishment of SARB,  



                                                                                                                                                                                                           108  

                                                                                                                                                                                                                                         

 SARB issued an opinion addressing the scope of its jurisdiction.                                                                                                                                                      In its arguments  



                                                                                                                                                                                                                                                        

 before SARB, the State argued that the question whether the Livengood-Yukon River  



                                                                                                                                                                                                                                               

 Road was taxable under AS 43.56 was a question of law, falling outside of SARB's  

                                                                                                                                                                                                     109   SARB rejected this  

                                                                                                                                                                                                                                                               

                                                                                                                                                                        

jurisdiction and within the exclusive jurisdiction of the judiciary. 



 argument, concluding that issues of both taxability and valuation were part and parcel  



                     107                  Cf. John v. Baker                                      , 982 P.2d 738, 811 (Alaska 1999) ("In determining a                                                                                                                 

 statute's meaning, courts will defer to the contemporaneous construction of the statute                                                                                                                                                             

 given by an agency charged with its administration.  Contemporaneity of construction   

 is important because often agency personnel have assisted in formulating the legislation                                                                                                                                                 

 and are thus knowledgeable of its intent and meaning."                                                                                                                    (footnotes omitted));                                              Keane v.   

Local Boundary Comm'n, 893 P.2d 1239, 1247 (Alaska 1995) ("A 'contemporaneous  

                                                                                                                                                                                                                                                                 

 and  practical  interpretation  of  a  statute  by  the  executive  officer[]  charged  with  its  

                                                                                                                                                                                                                                                               

 administration and enforcement . . . constitutes an invaluable aid in determining the  

                                                                                                                                                                                                                                             

 meaning  of  a  doubtful  statute.'  "  (alteration  and  omission  in  original)  (quoting  

                  ORMAN   J. S                         INGER, S                    UTHERLAND   STATUTORY   CONSTRUCTION      49.03   (5th   ed.  

 2B N 

  1992))).  



                     108                 AlyeskaPipeline , No. 001-000-0015 (StateAssessment ReviewBd.Dec. 9,  

                                                                                                                                                                                                                                                                     

  1974).  

                       



                     109                 Id. at 4-5.  

                                                                         



                                                                                                                               -28-                                                                                                                       7100
  


----------------------- Page 29-----------------------

of SARB's statutory directive to adjust the assessment roll if valuation was "excessive                                                  

or improper."            110  



                        SARB concluded that "[t]he standards set forth in AS 43.56 include both  

                                                                                                                                                    



taxability and valuation standards. To say that [SARB] must accept without question the  

                                                                                                                                                       



taxability of a particular piece of property would prevent [SARB] from acting as an  

                                                                                                                                                        

appella[te] agency and . . . would subvert the legislative intent in creating [SARB]."111  

                                                                                                                                                              

SARB then went on to find that the road was not taxable under AS 43.56.112                                                                         This  

                                                                                                                                                   



opinion, issued one year after the passage of AS 43.56 and the creation of SARB,  

                                                                                                                                               



demonstrates that from its inception  SARB understood its jurisdiction to extend to  

                                                                                                                                                        



appeals on issues of taxability as well as valuation.   Such nearly contemporaneous  

                                                                                                                            



interpretations are reliable indicia of legislative intent and support the argument that  

                                                                                                                                                     



"assessment" includes an initial determination of taxability.  

                                                                                                             



                        While later SARB opinions are given less weight (than contemporaneous  

                                                                                                                            



opinions)   in   interpreting   AS   43.56,   they   nonetheless   confirm   SARB's   initial  

                                                                                                                                                



interpretation of the scope of its jurisdiction.   In many subsequent opinions SARB  

                                                                                                                                                



recognized  and  exercised  its  authority  to  decide  taxability  appeals  from  Revenue  

                                                                                                                                           

assessments.113                 As  recently  as  2008  SARB  heard  an  appeal  from  Revenue's  

                                                                                                                                       



            110         Id.  at 5.      



            111  

                               

                        Id.  



            112  

                                        

                        Id. at 3.  



            113         See, e.g., Kodiak Oilfield Haulers, Inc., Nos. 86-56-7, 86-56-10, 86-56-11,  

                                                                                                                                           

86-56-12, 86-56-13 (State Assessment Review Bd. May 22, 1986) (concluding that  

                                                                                                                                                     

drilling machinery and equipment fell within the definition of taxable property under  

                                                                                                                                 

AS 43.56); Parker Drilling Co., Nos. 85-56-04, 85-56-05, 85-56-06, 85-56-07 (State  

                                                                                                                                                 

Assessment Review Bd. May 24, 1985) (concluding that drilling rigs and associated  

                                                                                                                                         

                                                                                                                                   (continued...)  



                                                                          -29-                                                                     7100
  


----------------------- Page 30-----------------------

determination   that   roads   and  bridges   used   to   access   TAPS   infrastructure   were   not  



            114  

taxable.                                                                                                                       

                 SARB exercised its jurisdiction over this taxability appeal and concluded that  



                                                                                                                 

the roads and bridges were taxable under AS 43.56 because this property "remain[ed]  

                                                                                                115  Only in more recent  

                                                                                                                           

                                                                                       

primarily dedicated to ongoing pipeline operations of . . . TAPS." 



years has SARBabided by Revenue's interpretation of SARB's jurisdiction as extending  

                                                                                                                     

only to valuation appeals.116   But this new position does not obviate the fact that from its  

                                                                                                                                



inception and for several subsequent decades SARB has understood its jurisdiction to  

                                                                                                                                 



encompass taxability appeals.  

                                               



          113        (...continued)  



                                                                                                                              

equipment constituted taxablepropertyunderAS43.56); NorpacExploration Servs., Inc.  

                                                                                                                           

v. Petroleum Revenue Div., No 84-56-07 (State Assessment Review Bd. May 1984)  

                                                                                                                      

(concluding thatcertain pieces of drilling supportequipment werenot "taxableproperty"  

                                                                                                                      

under AS 43.56 because they were not used for oil exploration or support purposes  

                                                                                                                       

duringthetax year); Brinkerhoff Signal, Inc. v. Div. ofPetroleumRevenue,Nos. 83-56-4,  

                                                                                                                         

 83-56-5, 83-56-6 (State Assessment Review Bd. May 31, 1983) (concluding that several  

                                                                                                                 

drill rigs were taxable property  under  AS 43.56); Alascom,  Inc.  (State Assessment  

                                                                                                                         

Review Bd. Mar. 31, 1981) (concluding that a segment of a telecommunications system  

                                                                                                                              

did not meet AS 43.56's definition of "taxable property"); Arctic Pipe Inspection, Inc.  

                                                                                                                          

v.  Div.  of  Petroleum  Revenue,  Dep't  of  Revenue,  State  of  Alaska,  No.  80-2  (State  

                                                                                                                              

Assessment Review Bd. May 21, 1980) (determining that equipment used to inspect pipe  

                                                                     

fell within AS 43.56's definition of "taxable property").  



          114        Trans-Alaska Pipeline System, No. 08-SARB-TAX at 21-22 (May 30,  

                                                                                                                               

2008),         http://aws.state.ak.us/officeofadminhearings/Documents/TAX/PROP/  

             

TAX08SARB%20TAPS.pdf.  

                                               



          115       Id. at 22.  

                              



          116       See, e.g., Appeal from the 2009 Assessment , OAH No. 09-SARB-TAX at  

                                                                                                                                 

 1  (May  21,  2009)  (order  staying  appeal)  ("Taxability  issues  are  placed  under  the  

                                                                                                                              

jurisdiction of [Revenue] [under the regulations].").  

                                                                                



                                                               -30-                                                        7100
  


----------------------- Page 31-----------------------

                                2.              The timeline set forth in the statute                                    



                                The timeline that the legislature set for appeals of assessments provides                                                                                  



further insight into its purpose in enacting AS 43.56.                                                                         As the superior court recognized,                    



in AS 43.56 the legislature "set a compressed time frame from initial assessment through                                                                                                      



SARB appeal that accommodate[s] the rhythm of yearly tax collection." First, Revenue                                                                                                       



                                                                                                                                           117  

must mail initial assessment notices by March 1 each year.                                                                                                                        

                                                                                                                                                  An owner or municipality  



                                                                                                                                                                                                          

must then submit any objection to this initial assessment notice within 20 days of its  



                                   118  

                                                                                                                                                                                                       

effective date.                             If the property owner or municipality wishes to further appeal this  



                                                                                                                                                                                                  

assessment to SARB, it must do so within 50 days of the effective date of the initial  

                                             119        SARB must then issue a final decision within  seven days of  

                                                                                                                                                                                                          

assessment notice. 

                                                                           120  Finally, by June 1 of each year, Revenue must certify  

holding a hearing on the appeal.                                                                                                                                                                 

                                                           

                                                                                                                                                                            121     Thus in the  

the final assessment roll and mail final assessments to property owners.                                                                                                                                

                                                                                                                                                         



timeline established by the legislature, all appeals from AS 43.56 initial assessment  

                                                                                                                                                                                     



notices issued under AS 43.56 are to be resolved at the administrative level within  

                                                                                                                                                                                                



approximately three months, by no later than June 1 of each year.  

                                                                                                                                                               



                                In  contrast  to  this  compressed  timeline  the  legislature  established  for  

                                                                                                                                                                                                        



appeals to SARB, the process for taxability appeals before Revenue can take years for  

                                                                                                                                                                               



                117             AS 43.56.100.                        



                118             AS 43.56.110(a).  

                                          



                119             AS 43.56.120(a).  

                                                                           



                120             AS 43.56.130(g).  

                                                                            



                121  

                                          

                                AS 43.56.135.  



                                                                                                   -31-                                                                                             7100
  


----------------------- Page 32-----------------------

                                                                                                      122  

a final judgment to be rendered.                                                                               This lengthy process for taxability appeals before                                                               



Revenue is not only contrary to the expedited timeline the legislature set out for appeals                                                                                                                                                              



before SARB, but it can also prevent valuation appeals before SARB frombeing decided                                                                                                                                                                    



in the timely manner prescribed by the legislature.                                                                                                                 Several valuation appeals before                                                       



 SARB have been stayed pending resolution of taxability appeals being heard before                                                                                                                                                                        

                              123          These delays directly contravene the accelerated administrative appeal  

Revenue.                                                                                                                                                                                                                                                  



process for oil and gas property assessments set forth by the legislature in AS 43.56, with  

                                                                                                                                                                                                                                                                  



the goal of the assessment process being completed on an annual basis.  Revenue has  

                                                                                                                                                                                                                                                                    



thus promulgated a regulation that allows it to circumvent the strict statutory deadlines  

                                                                                                                                                                                                                                                  



for completing administrative appeals under AS 43.56.   And, as Valdez argues, the  

                                                                                                                                                                                                                                                                     



current  lengthy  process  for  taxability  appeals  before  Revenue  has  grave  financial  

                                                                                                                                                                                                                                                  



                     122                  For example, as recounted by a 2013 superior court decision on a taxability                                                                                                                           



appeal by Valdez, Valdez first appealed certain taxability determinations in 1997, but                                                                                                                                                                               

these claims languished                                                   in administrativeproceedings for many years and did not receive                                                                                                                 

a final judgment from the superior court until late 2013, approximately 16 years after                                                                                                                                                                           

they were initially raised.                                                          City of Valdez v. State, Dep't of Revenue                                                                                               , Nos. 3VA-00-       

00022 CI, 3VA-10-00084 CI, 3AN-11-07874 CI (consol.) (Alaska Super., Nov. 18,                                                                                                                                                                                        

2013).   



                     123                  SARB  has  issued  inconsistent  decisions  regarding  whether  valuation  

                                                                                                                                                                                                                                                

appeals proceeding before it should be stayed pending the outcome of taxability appeals  

                                                                                                                                                                                                                                                        

before Revenue.  Compare Trans-Alaska Pipeline Sys., OAH No. 13-0474-TAX at 2  

                                                                                                                                                                                                                                                                  

(State Assessment Review Bd. May 1, 2013) (order denying motion to stay valuation  

                                                                                                                                                                                                                                                  

appeal) ("[T]he valuation appeal and the taxability appeal can continue simultaneously  

                                                                                                                                                                                                                                

on two separate tracks."), with Brooks Range Petroleum Co., OAH No. 14-0587-TAX  

                                                                                                                                                                                                                                  

at 2  (State Assessment Review Bd.  May  2,  2014)  (order  staying  valuation  appeal)  

                                                                                                                                                                                                                      

("[Revenue] should retain the appeal until all questions of taxability are resolved.").  

                                                                                                                                                                                                                                                                          



                                                                                                                                  -32-                                                                                                                          7100
  


----------------------- Page 33-----------------------

implications for affected municipalities because they must refund overpayments of taxes                                                                    



                                                                    124  

to taxpayers at eight percent interest                                                                                                             

                                                                          and must plan annual budgets without knowing  



                                                     

their expected tax revenue.  



                         3.           Summary  



                         In sum Revenue's interpretation of AS 43.56 through its regulation is  

                                                                                                                                                                



inconsistent with the statute's text, legislative history, and purpose.  This renders the  

                                                                                                                                              



challenged regulation invalid because it has no reasonable basis in the statute and thus  

                                                                                                                                                            

falls outside of Revenue's statutory authority.125  

                                                                                             



V.           CONCLUSION  



                         We therefore REVERSE the superior court judgment and REMAND for  

                                                                                                                                                              



entry of judgment in favor of the City of Valdez.  

                                                                                               



             124         AS 29.45.500(a)-(b).   



             125         See McDaniel v. Cory, 631 P.2d 82, 88 (Alaska 1981) ("Administrative  

                                                                                                                                    

agencies rest their power on affirmative legislative acts. They are creatures of statute and  

                                                                                                                                                             

therefore must find within the statute the authority for the exercise of any power they  

                                                                                                                                      

                                    M. J   UR. 2     D  Administrative Law                      70 (1962)).     

claim."  (citing 1 A 

                              



                                                                              -33-                                                                        7100
  

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