Frankfurt lowers tax bill for gas companies, seeks to dismiss lawsuit
BANGOR — Bangor Natural Gas filed a lawsuit March 3 against the city of Frankfort over a 2021 tax bill of $14,851.81 issued to the company for part of a pipeline through the city that carries gas. fuel to the company’s facility in Bangor. The company leases the pipeline from Maine’s Loring Development Authority, the municipal public company that owns it.
On March 14, the city reduced the bill because it identified Bangor Natural Gas Co. as Bangor Gas Co., city attorney William Kelly said in an email. The city will review the information provided by the company with an expert, and then the board of assessors will review the case and consider the exemption now claimed by the company.
Because the entire tax bill has been reduced, Kelly will file a motion to dismiss the lawsuit.
The lawsuit, filed in Penobscot County Superior Court, says no municipality through which the pipeline passes issued a tax bill to Loring for it. Since the pipeline is a public instrument of the state, the gas company argues that it is exempt from property tax. No other city has issued tax bills to tenants of other property on the former Loring-owned airbase.
The law that created the Loring Development Authority makes it clear that its property cannot be taxed, but does not mention anything that specifically prevents its tenants from being taxed, according to the Maine Legislative Assembly website.
But the complaint cites a lawsuit that determined that municipalities cannot assess property taxes on tenants of land owned by the Maine Turnpike Authority because that land is exempt from property tax.
In a March 11 interview, Kelly said the property tax aspect of the law governing Loring property must be interpreted. “It’s a bit of a new issue with this law, so it’s going to be something we’ll have to address,” he said in an interview with The Republican Journal.
It is his understanding that the portion of the pipeline from Bangor to Limestone is being “mothballed” or removed from use, he said in an email to the Journal on March 10. The portion of the pipeline from Searsport to Bangor is owned, maintained and operated by a private company, he said, which is the gas company.
Maine law allows tenants in common or joint tenants to be taxed on the property they rent, according to the Legislature’s website.
The city issued the 2021 tax bill to the gas company for 5 1/2 miles of pipeline that runs through the city, Kelly said in the March 10 email. The city assessed the land at $1,072,333 on the bill which was recently lowered. When the company received the invoice, it notified the city of the pipeline’s exempt status, according to the complaint. The company asked the city to correct itself what it considered an illegality.
Kelly said he sent a letter to the attorney representing the company requesting more information about the pipeline and its uses. Before providing the requested information, the company filed a complaint.
Maine’s Loring Development Authority was established in 1993 to redevelop the former Loring Air Force Base in Limestone, according to the complaint. It acquired the pipeline in 2005.
The city had attempted to issue a tax bill to Bangor Natural Gas, which was under a different name at the time, for the 2013 tax year, but the city’s board of assessors voted to reduce the bill to the value of the pipeline after the company told the city the taxation was illegal, according to the complaint.
Maritime Energy owns a private pipeline through the city, which is taxed, Kelly said March 11. He said the city has experience taxing pipelines.
Kelly invited officials from other cities along the Searsport to Bangor pipeline to contact him or the Frankfurt Select Board to discuss broader participation in the new issue.
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