Supreme Court sides with local, state assessors regarding Murray properties

CHARLESTON, W.Va. — The Supreme Court of Appeals of West Virginia filed on Monday a ruling supporting a circuit court’s decision that affirmed how Murray Energy properties were valued and assessed.

A majority of the court sided with state Tax Commissioner Dale Steager, the Marshall County Commission and Marshall County Assessor Christopher Kessler. Justice Evan Jenkins wrote a dissenting opinion.

Murray Energy Corporation and Consolidation Coal Company opposed the state Tax Department’s valuation of its coal properties, alleging the department’s use of the coal seam thickness average and rolling three-year average to determine the average steam coal price per ton overvalued the properties.

The state Tax Department values coal inside the mine and future income through a mass appraisal system. The statewide steam coal price per ton average is calculated using regulated sources and formulas. For the 2016 tax year, the per ton average was $60.35.

Factors influencing the price include the average price for the three previous tax years relative to the assessment date, which in this case was July 1, 2015. The figure was open for public comment until Aug. 15, 2015.

According to the court, Murray Energy did not comment on the price during this period.

Murray Energy argued the “spot price” of coal should have been used rather than the average coal seam thickness and rolling three-year average.

Murray Energy appealed to the county commission, operating as the Marshall County Board of Equalization and Review. Witnesses for Murray Energy said the average price per ton should have been $41.08 or $51.50 per ton if using publicly-available information.

The Tax Department argued the mass appraisal system was “designed to eliminate ‘peaks and valleys’ in the price of coal” to better understand incoming tax dollars. Jeffrey Kern, a mineral appraisal expert who assisted in the design of the appraisal system, added the amount was higher than the average price per ton in July 2015 because of the three-year rolling average

Margaret Workman

The board ruled against the company. Murray Energy appealed the board’s decision to the Marshall County Circuit Court, which denied the appeal in December 2017.

“The circuit court concluded that the method of valuing coal properties as prescribed in the Code of State of Rules violated neither the statutory requirement of assessment at ‘true and actual value’ nor the constitutional equality requirements of Article X, Section 1 of the West Virginia Constitution and the Equal Protection provisions of the United States and West Virginia Constitutions,” Justice Margaret Workman wrote.

“Upon careful review of the briefs of the parties and amicus curiae, the appendix record, the arguments of the parties, and the applicable legal authority, we agree with the circuit court’s legal conclusions and therefore affirm the December 7, 2017, order of the Circuit Court of Marshall County, West Virginia.”

Jenkins, writing alone in the dissent, stated evidence presented before the court showed the Tax Department’s three-year rolling average did not accurately value Murray Energy’s resources.

“I simply cannot agree to such a blatant departure from the constitutional and statutory commands that property be taxed at its ‘true and actual’ value,” he wrote.

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