Burlington Northern Railroad v. Department of Revenue

Opinion by Judge Thompson.

The State of Washington valued Burlington Northern Railroad Company’s transportation property within the state, for ad valo-rem tax purposes, at $412.4 million for tax year 1988 and $423.5 million for tax year 1989. Burlington Northern sued the state in district court under section 306 of the Railroad Revitalization and Regulatory Reform Act of 1976 (the Act), 49 U.S.C. § 11503 (1988), alleging that the state discriminated against it by overvaluing its property. Burlington Northern contended the maximum value of its transportation property in Washington should have been no more than $94.1 million for tax year 1988 and no more than $90.8 million for tax year 1989.

After a bench trial, the district court upheld the state’s valuation, except that it excluded the lessor’s interest in property leased by Burlington Northern and it ordered the state to give Burlington Northern the benefit of a statutory exemption for motor vehicles for 1989. Burlington Northern appeals. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.

Section 306(l)(a) of the Act, as recodified, prohibits a state from assessing railroad transportation property “at a value that has…