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I <br /> <br /> NORTH CAROLINA ASSOCIATION Of COUNTY COMMISSIONERS <br /> MEMORANDUM <br /> <br /> TO: Board Chairmen, Managers and Attorneys <br /> <br /> FROM: Robert C. Hunter, N. C. County Attorneys Association, <br /> McDowell County and Butch Gunnells, Staff Counsel, <br /> NCACC <br /> <br /> DATE: October 15, 1981 <br /> RE: Update on Railroad Lawsuit <br /> <br /> The purpose of this memo is to provide you with an update on the <br /> Railroad lawsuit and the financial picture for the collective legal <br /> defense fund. <br /> <br /> During its annUal summer conference this past July, the North Carolina <br /> County Attorneys Association considered developments in the case of <br /> Clinchfield Railroad Company, et al., v. Mark Lynch, Secretary of <br /> Revenue, et al, which is the lawsuit brought by the major railroads <br /> in the state challenging the level of taxation of their property <br /> in relation to other property. The railroads generally allege that <br /> their property is revalued annually so that it is always taxed at <br /> true value, while most other property is taxed at less than true' value <br /> for a variety of reasons - including the eight-year revaluation cycle <br /> used for locally assessed real property. The railroads seek to <br /> establish the level of disparity that exists on a county-by-coUnty <br /> basis, and they seek to have their properties' value (and thus <br /> their tax burden) lowered to correct the alleged disparity. <br /> <br /> In considering the case, the County Attorneys Association noted that <br /> the lawsuit was brought only against state level defendants, the <br /> North Carolina Secretary of Revenue and the Director of the Revenue <br /> Department's Ad Valorem Tax Division. We observed With concern that <br /> it was the counties who stood to lose a portion of their tax revennes <br /> if the railroads succeed, that the loss might be substantial on a <br /> statewide basis if the railroads are completely successful, that the <br /> outcome might have implications for other utilities considering <br /> similar challenges, and that no counties were directly involved in <br /> the lawsuit in order to challenge and refute some of the railroad's <br /> allegations~ At the same time, we recognized that the actual one <br /> year tax loss for most individual counties involved was not significant <br /> enough to justify each county retaining legal counsel and directly <br /> intervening in the case~ <br /> <br /> I <br /> <br /> <br />