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To Kill a Mockingbird

Last week, I argued a property tax appeal before the West Virginia Supreme Court of Appeals. The issue involved the valuation of reserve coal seams and the proper role for the County assessor in the assessment of that type property.

In West Virginia, reserve coal properties are valued by the State Tax Commissioner using the reserve coal valuation model. That is a computer model that takes in to consideration a number of factors, particularly relating to predicting when the reserve coal may be mined, and produces a value for that property. That value is forwarded to the County assessor at the beginning of the calendar year and according to state law, the assessor has the obligation to apply the equalization percentage (60%) of the property value and put the property on the books at the resulting figure. If the assessor disagrees with the valuation of the property, he or she is empowered to take the matter to the West Virginia Valuation and Training Commission and explain why she disagrees with the proposed valuation. If she prevails, then the valuation of that type of property should be adjusted not only for that particular County but for all counties in which that type property is located.

In the case on appeal, the assessor did neither. After hearing a speech by an executive of another coal company, in which the executive predicted that his company would mine all of that particular type of reserve coal in that County within 15 to 20 years, she hired a consultant who reviewed several components of the RCVM. After putting the State Tax Department’s equalized value on the books, the assessor suggested to the County Commission, sitting as a board of equalization and review, that the assessment was incorrect and should be adjusted pursuant to the opinion of the consultant. The County agreed and the value was increased by approximately 1000%

The issue before the court was whether the assessor has the authority to challenge her own assessment and whether she or the County Commission has the authority to fundamentally change the values produced by the State Tax Commissioner through the reserve coal valuation model.

Among other things, I argued about the damage to the constitutional principle of equalization of taxation throughout the state. The ability of the assessor of one County to fundamentally change the value of reserve coal in that County would, in my estimation, violate the constitutional requirement that all property be subject to equal and uniform taxation throughout West Virginia.

The Supreme Court of Appeals should issue an opinion in this matter before the end of this term, which concludes in early December.