In Re the Assessment for the Year 2000 of Certain Property Owned by Oneok Field Services Gathering, LLC

BOUDREAU, Justice.

11 This is an appeal from an order of the district court reducing the ad valorem tax valuation of the personal property of Oneok Field Services Gathering, LLC, in Washita County, Oklahoma, for the 2000 tax year. A statutory construction issue is presented: Has the Legislature classified pipeline rights of way as real property or personal property for assessment by a county assessor? We conclude that for purposes of ad valorem tax assessment by a county assessor, pipeline rights of way are within the statutory definition of real property. We hold the district court did not err in granting summary judgment on this issue in favor of Oneok Field Services, LLC.

I. Background

T2 Oneok Field Services Gathering, LLC, (Oneok), is in the business of gathering natural gas. Oneok has a natural gas pipeline gathering system in Washita County. For the 2000 tax year, Oneok submitted sworn *902schedules of its business personal property to the Washita County Assessor (county assessor).1 The county assessor, using the cost approach, estimated a fair cash value for Oneok's natural gas pipeline gathering system to be $2,711,847.00. In arriving at this valuation, the county assessor included $347,210.00 for the pipeline rights of way as a cost of construction. The county assessor classified Oneok's property as personal property.2

13 Oneok protested the valuation before the county assessor and then the Washita County Board of Equalization (county board)3 In its protest, Oneok alleged that "right of way value should not be on the assessment for personal property." - The county board rejected Oneok's protest and sustained the county assessor's personal property valuation for Oneok's pipeline gathering system.

"I 4 Oneok appealed to the District Court in Washita County, Oklahoma.4 Its petition alleged that:

The $2,711,847 valuation ... is in excess of the actual fair market value of the subject property for the reason that such value includes $347,210 ($2.00 per foot of gathering line) for value attributable to rights-of-way.
The valuation recommended by the County Assessor and affirmed by the Board is erroneous as a matter of law to the extent that the Board's valuation taxes right-of-way as personal property. Under Oklahoma law, right-of-way is an interest in real property taxable to the fee owner. It is not taxable as personal property. As a result, the determination of the fair market value for the property by the County Assessor and the Board is arbitrary, excessive, and fails to take into account the actual value and situation of the subject property.

The county assessor denied that she failed to used a proper methodology in determining fair cash value or that her valuation was arbitrary and excessive.

T5 Oneok moved for summary judgment arguing that the Legislature has not classified pipeline rights of way as personal property for ad valorem tax purposes; and, that pipeline rights of way constitute interests in real property taxable to the fee owner. The district court granted summary judgment, finding there was no substantial controversy as to any material fact and concluding that rights of way are interests in real property as defined in 68 O.S.1991, 2806 and that under Oklahoma law, all interests in real property are taxed to the fee owner. The judgment ordered that the fair cash value of Oneok's natural gas gathering system be reduced by $347,210.00. The district court denied the county's motion for new trial.

T6 The county timely commenced appeal to this Court asserting that the district court erroneously held that pipeline rights of way are not taxable ad valorem. The county also raised questions as to whether there is any evidence establishing that the county assessor's valuation exceeds Oneok's fair cash value or that the valuation should be reduced by *903$347,210.00. We, sua sponte, retained the appeal.

II. Standard of Review

{7 Oneok's appeal to the district court raised a first impression issue as to whether the Legislature classified pipeline rights of way as personal property for purposes of ad valorem taxation. The definitions of real property and personal property set forth in the ad valorem tax statutes are critical to the resolution of this issue. Because the meaning of statutory language is a pure issue of law and because the trial court's disposition was effected by summary judgment, the issue stands before us for de novo review5 In a de novo review, we have plenary, independent and non-deferential authority to determine whether the trial court erred in its application of the law.6

IIL - Taxable status of Oneok's pipeline rights of way under the existing statutory taxing scheme

T8 The power to tax is an exclusively legislative function that can be exercised only under statutory authority and in the manner provided by law.7 Subject only to constitutional restrictions 8 and the will of the people expressed through elections, the Legislature has plenary power in regard to taxation.9

T9 Our state constitution provides that "(a)ll property which may be taxed ad valo-rem shall be assessed at its fair cash value".10 The tax is based on the value of the property as of January 1st of each year.11 The value of the property is the price at which a willing buyer would buy property and a willing seller would sell property if both parties are knowledgeable about the property and its uses.12 The county assessor estimates this fair cash value by making a market appraisal 13 and calculates the assessed value by multiplying the estimated fair cash value by the assessment ratio.14

110 Within constitutional limitations, the Legislature has power to classify property for purposes of taxation. The Legislature may arrange and divide the various subjects of taxation into distinct classes and it may exercise wide discretion in selecting and classifying the subjects of taxation.15 The manner in which the Legislature defines property classes for ad valorem tax purposes is not constrained by the common law.16 Be*904cause the power to classify for tax purposes is vested in the Legislature, courts will not interfere with legislative classifications and definitions for purposes of ad valorem taxation in the absence of constitutional transgression in classifying the property to be taxed.17

1 11 The controversy in this case relates to the character of pipeline rights of way for purposes of assessment by the county assessor, i.e., whether they should be taxed as real or personal property. This controversy must be resolved by determining whether pipeline rights of way generally have the important characteristics which distinguish the interests described by the tax statutes to be applied. Oklahoma has two tax statutes which define the general terms "real property" and "personal property". Neither specifically refers to pipeline rights of way.

1 12 Defining "real property," 68 O.S.1991, 2806 provides:

Real property, for the purpose of ad valorem taxation, shall be construed to mean the land itself, and all rights and privileges thereto belonging or in any wise appertaining, such as permanent irrigation, or any other right or privilege that adds value to real property, and all mines, minerals, quarries and trees on or under the same, and all buildings, structures and improvements or other fixtures, including but not limited to improvements such as barns, bins or cattle pens, or other improvements or fixtures of whatsoever kind thereon, exclusive of such machinery and fixtures on the same as are, for the purpose of ad valorem taxation, defined as personal property.

113 Defining "personal property," 68 O.S.Supp.2000, 2807 provides in part:

Personal property, for the purpose of ad valorem taxation, shall be construed to include:
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12. a. All tanks and containers used to store or hold erude oil or any of its products or byproducts and all tanks and containers used to store or hold gasoline, water, or other liquids or gases,
b. All oil, gas, water or other pipelines,
c. - All telegraph and telephone lines,
d. All railroad tracks,
e. All oil and petroleum products in storage; and

13. All other property, having an actual, constructive or taxable situs in this state, and not included within the definition of real property.18

*905T14 Oneok argues that pipeline rights of way cannot be taxed as personal property because they fall within the definition of real property. Oneok maintains that the Legislature defined real property in § 2806 as not only the land itself and any right or privilege that adds value to real property, but "all rights and privileges thereto belonging or in any wise appertaining" to the land itself. Oneok contends that pipeline rights of way fall within this latter category of real property for purposes of ad valorem taxation. Oneok points out that § 2807(13) expressly excludes from the definition of personal property all property included within the definition of real property.

15 The county assessor asserts that pipeline rights of way are personal property for ad valorem taxation. The county assessor points out that oil and gas pipelines are unambiguously defined as personal property under § 2807(12)(b). Accordingly, the assessor argues that all pipeline components, including the value attributable to pipeline rights of way, are taxable as personal property.

116 Clearly the types of interests which we here consider, interests arising from pipeline rights of way, are interests in land.19 They entitle the owner to a specific limited enjoyment in land owned by another20 However, an interest in land may be classified as real property or as personal property. The common law basis for distinguishing interests in land from other interests lies in the now-obsolete feudal land-law concept of an estate in land.21 If the interest is for life or has the possibility of enduring perpetually, it is freehold in character and accordingly classified as real property.22 If the interest in land is less than a freehold, such as that which is granted for a term of years, it is but a termor's chattel real which is not a true estate in land.23

T17 Although we cannot determine from the record on summary judgment the duration of the pipeline rights of way, this inability does not prevent us from deciding this controversy. The Legislature is not constrained within the straitjacket of common law concepts in classifying a particular interest as realty or personalty for tax purposes.24 It resides within the power of the Legisla*906ture to depart from the common law classification of property for purposes of ad valorem taxation. Our review of $ 2806 leads us to conclude that the Legislature intended to depart, in part, from the common law by defining real property in § 2806 sufficiently broad enough to include a pipeline right of way whether freehold or for a term of years.

118 The Legislature has defined real property in § 2806 as not only the land itself but also "all rights and privileges thereto belonging or in any wise appertaining" to the land itself. The word appertaining has been defined alternately as "connected with in use or occupancy" 25 or "something used in connection with".26 Under either definition, a pipeline right of way, whether freehold or for a term of years, is a right "appertaining" to the land that it burdens.

19 In an effort to demonstrate that pipeline rights of way are not encompassed within the Legislature's definition of real property, the county assessor argues that the language "all rights and privileges thereto belonging or in any wise appertaining" as used in $ 2806 is qualified by the subsequent language "or any other right or privilege that adds value to the land". The county assessor maintains that because pipeline rights of way burden the land they traverse, they are neither rights or privileges belonging to the land nor appurtenant to the land.

120 We disagree. The use of the word "or" in the definition introduces another, independent category of interests included in real property, "or any other right or privilege that adds value to the land". As used in § 2806, the word "or" does not introduce a subordinate general qualification to the category of "all rights and privileges thereto belonging or in any wise appertaining". Stated otherwise, the fact that pipeline rights of way do not add value to the land does not exclude them from the legislatively designed definition of real property in § 2806.

T21 In summary, Oneok's pipeline rights of way are rights and privileges appertaining to the land and fall within the class of real property for purposes of ad valorem taxation. Because they fall within the definition of real property, they cannot qualify as personal property under the terms of § 2807.27

IV. In the absence of a statute providing otherwise, the various interests which ~ may be held in realty are not severable for the purposes of taxation

1 22 The county assessor argues that even if pipeline rights of way fall within the statutory definition of real property, they should be taxed separate from the fee. As legal support, the county assessor relies upon Gulf Refining Company v. Jenkins.28 The Gulf Refining case is readily distinguishable. The issue in Gulf Refining was whether a resale tax deed conveying the fee extinguished the pipeline right of way of a public service corporation. Gulf Refining concluded that the pipeline right of way was not affected by the resale tax deed because Gulf, as a public service corporation, reported its taxable property, including its rights of way, to the State Board of Equalization for assessment.

123 By suggesting that pipeline rights of way should be taxed separately from the fee, the county assessor is asking us to overrule a line of cases beginning with Indian Territory *907Illuminating Oil Co., holding that in the absence of a statute providing otherwise, the various interests which may be held in realty are not severable for the purposes of taxation.29 In effect, the county assessor is calling for a change in the statutory taxing scheme that would permit the assessment to be made against the holder of the pipeline right of way instead of the fee owner of record. This cannot be done.

124 The county assessor also contends that pipeline rights of way can be of tremendous market value, but add nothing to the value of the fee. The county assessor asserts that a pipeline right of way is a benefit to the pipeline and a detriment to the fee. The county assessor argues that unless the pipeline right of way is taxed to the holder, it will effectively escape taxation.

1 25 This is the same argument offered by the county in Oklahoma Industries Authority v. Barnes. This Court dismissed that argument stating: 30
While a lessee's possessory interest may doubtless be a valuable species of property, its characterization as an asset of great market value does not transform that interest, absent some statutory authority, into a separate legal estate that is subject to taxation. To be taxable, an interest in real property must fall within an established legislative classification. (Footnote omitted.)

126 The county assessor also points to the statute which provides that all property which is not exempted is subject to tax.31 While this Court may not ignore the manifest purpose of the law to tax all property not exempted, where a statute does not fairly include pipeline rights of way as subject to tax, the manifest purpose to tax all property cannot be relied upon by the judiciary to tax that property in a manner not authorized by law.32 This is a matter for the Legislature if, in its view, pipeline rights of way are a species of property escaping taxation.

V. Conclusion

127 In defining the types and kinds of property subject to assessment by a county assessor, the Legislature has classified pipeline rights of way as real property. In the absence of a statute providing otherwise, the various interests which may be held in real property are not severable for the purpose of ad valorem tax assessment by a county assessor. The county assessor has no authority to assess pipeline rights of way as personal property. We hold the district court did not err in granting summary judgment on this issue in favor of Oneok Field Services, LLC.

SUMMARY JUDGMENT AFFIRMED.

I 28 HARGRAVE, C.J., WATT, V.C.J., and HODGES, LAVENDER, OPALA, SUMMERS, and WINCHESTER, JJ., concur. 1 29 KAUGER, J., concurs in result.

. Oneok's sworn schedules of its property in Wa-shita County are not included in the record on appeal. In the filings in this Court, Oneok said it used the schedule for business personal property. Apparently, it did not use the schedules for pipelines under 68 O.S.1991, 2851, even though 68 O.S.1991, 2838 provides that locally-assessed corporations, other than banks, shall return sworn lists or schedules of taxable property within each county, itemizing their property in the same manner and to the same extent as required by railroads, air carriers and public service corporations. However, the county assessor has not raised any issue regarding the sworn schedules filed by Oneok.

. 68 O.S.1991, 2837 requires the county assessor to assess the real and personal property as listed separately; and, 68 O.S.Supp.2000, 2867 requires the county assessor to make assessments of property under each classification and prepare an abstract of the assessment showing separately the valuations of all 1) personal property, 2) real property, 3) railroad and air carrier property, and 4) public service corporation property in each municipality.

This opinion references the most recent codification of the applicable statutory language.

. 68 O.S.1991, 2876 (D) and (F).

. 68 O.S.1991, 2880.1. Pursuant to § 2880.1(C), a taxpayer or a county assessor aggrieved by any order of a county board of equalization may appeal to the district court where the trial on the issues of law or fact, or both, shall be de novo.

. Manley v. Brown, 1999 OK 79, 989 P.2d 448, 455.

. Id.

. In Re Indian Territory Illuminating Oil Co., 1914 OK 261, 43 Okla. 307, 142 P. 997.

. Oklahoma Industries Authority v. Barnes, 1988 OK 98, 769 P.2d 115, 117.

. In Re Indian Territory Illuminating Oil Co., supra.

. Okla. Const., art. 10, § 8.

. 68 O.S.Supp.2000, 2817.

. 68 O.S.Supp.2000, 2802 (18).

. In 1988, the Legislature overhauled our ad valorem tax statutes, modernizing the valuation process and assuring greater statewide uniformity. 1988 Okla. Sess. Laws, ch. 162. In furtherance of the mandate in the Okla. Const., art. 10, § 8, that property must be assessed on its fair cash value, the reform legislation expressly defined valuation methodologies to be utilized to estimate fair cash value. 68 O.S.Supp.2000, 2802 (18) defines "fair cash value" in terms of the willing buyer/willing seller value; § 2802(14) defines "cost approach" as a method to establish fair cash value using the current construction cost of improvements, subtracting accrued depreciation and adding the value of the land; § 2802(20) defines "income and expense approach" as a method using the present value of the projected income stream; and § 2802(25) defines "sales comparison approach" as a method using sales information of comparable properties.

. Okla. Const., art. 10, § 8, provides the ranges of assessment percentages.

. - Personal Loan & Finance Co. v. Oklahoma Tax Commission, 1968 OK 11, 437 P.2d 1015. Pursuant to .the Okla. Const., art. 10, § 22, the Legislature, at 68 O.S.Supp.2000, 2803 (A), classified property into five types or classes:

1) real property,

2) personal property,

3) personal property exempted pursuant to Okla. Const., art. 10, § 6(b),

4) public service corporation property, and

5) railroad and air carrier property.

. - Oliver v. City of Tulsa, 1982 OK 121, ¶ 19, 654 P.2d 607, 611.

. Stanolind Crude Oil Purchasing Co. v. State Board of Equalization, 1935 OK 833, 174 Okla. 320, 49 P.2d 1089; and Board of Commissioners of Oklahoma County v. Ryan, 1924 Okla. 1075, 107 Okla. 278, 232 P. 834.

. The full text of 68 O.S.Supp.2000, 2807 reads:

Personal property, for the purpose of ad valorem taxation, shall be construed to include:
1. All goods, chattels and effects;
2. All improvements made by others upon lands, the fee of which is vested in the United States or this state; all improvements, including elevators and other structures, upon lands, the title to which is vested in any railway company or other corporation whose property is not subject to the same mode and rule of taxation as other property; and all improvements on leased lands that do not become a part of the realty;
3. The dormant, and other stock of nurserymen, including all trees, shrubs and plants that have been dug and placed in bins or storage, and are ready for sale. The trees, shrubs or plants of a nurseryman shall be "growing crops" within the meaning of Section 6 of Article X of the Oklahoma Constitution and exempt from ad valorem taxation, if such trees, shrubs or plants are grown upon the premises of the nurseryman, removed from the earth on such premises prior to any preparation for resale, and if such trees, shrubs or plants are held for resale in a manner that will permit the continued growth or development of the tree, shrub or plant;
4. All horses, cattle, mules, asses, sheep, swine, goats and other livestock including poultry, and commercially raised livestock including but not limited to animals of the families bovidae, cervidae and antilocapridae or birds of the ratite group. Such livestock or poultry having a speculative value, by reason of the fact that the same is subject to registration in some recognized association, shall be assessed on the market value as though the same had no speculative value;
5. All household furniture, including gold and silver plate, musical instruments, watches and jewelry;
6. Personal, private or professional libraries;
7. All wagons, vehicles or carriages and all farm tractors, implements or machinery apper*905taining to agricultural labor; and all types of motors, feed grinders, pumps for irrigation and other irrigation equipment;
8. All machinery and materials used by manufacturers, and all manufactured articles, including all machinery and equipment of cotton gins, cottonseed oil mills, newspaper and printing plants, refineries, gasoline plants, flour and grain mills and elevators, bakeries, ice plants, laundries, automobile assembly plants, repair shops, breweries, radio broadcasting stations, tractors, graders, road machinery and equipment, and all other similar or related plants or industries;
9. All goods and capital employed in merchandising;
10. All abstractors' books and the records contained therein; and equipment and all other personal property and records and files of mercantile credit reporting organizations;
11. All agricultural implements or machinery, goods, wares, merchandise, or other chattels, in this state, in possession of, or under the control of, or held forsale by, any warehouseman, agent, factor or representative in any capacity of any manufacturer, or any dealer or agent of any such manufacturer;
12. a. All tanks and containers used to store or hold crude oil or any of its products or byproducts and all tanks and containers used to store or hold gasoline, water, or other liquids or gases,
b. All oil, gas, water or other pipelines,
c. - All telegraph and telephone lines,
d. All railroad tracks,
e. All oil and petroleum products in storage; and
13. All other property, having an actual, constructive or taxable situs in this state, and not included within the definition of real property.

. Hinds v. Phillips Petroleum Company, 1979 OK 22, 591 P.2d 697.

. - Story v. Hefner, 1975 OK 115, 540 P.2d at 565, 566.

. Hinds v. Phillips Petroleum Company, 591 P.2d at 698-699.

. Id. at 698.

. Oklahoma Railway Co. v. Severns Paving Co., 1917 OK 488, 67 Okla. 206, 170 P. 216, 219; 1 Powell on Real Property, § 98 (Matthew Bender). See also, 60 O.S.1991, 26, providing that estates in real property for life are freeholds and estates for years are chattels real.

. - Oliver v. City of Tulsa, 1982 OK 121, ¶ 19, 654 P.2d 607, 611.

. Black's Law Dictionary, 6th ed.1990; Bouvier's Law Dictionary, 3rd Revision (8th ed.).

. McVeety v. Hayes, 191 P. 401, 111 Wash. 457 (1920).

. The county assessor argues that it is immaterial that pipeline rights of way are not expressly included in the definition of personal property because § 2851 identifies pipeline rights of way for purposes of ad valorem taxation. In that statute, the Legislature expressly provided that pipeline companies must report their rights of way to the Oklahoma Tax Commission. 68 O.S.1991, 2851. Public service corporations report their property to the Oklahoma Tax Commission. for assessment by the State Board of Equalization. 68 O.S.Supp.2000, 2847 and 2848. Public service corporation property is a distinct classification of property for ad valorem tax purposes. McLoud Telephone Company v. State Board of Equalization, 1982 OK 154, 655 P.2d 1037. In the absence of explicit provision from the Legislature, the treatment of a public service corporation's pipeline rights of way does not extend to similarly used property subject to assessment by a county assessor. Id.

. 1944 OK 227, 151 P.2d 419.

. - In re Indian Territory Illuminating Oil Co., 142 P. at 997, Syllabus by the Court.

. - Oklahoma Industries Authority v. Barnes, 769 P.2d at 118.

. 68 O.S.1991, 2801.

. Oklahoma Industries Authority v. Barnes, 769 P.2d at 117.