DO NOT REMOVE FILE BGPY FROM FILE IN THE WEST VIRGINIA SUPREME COURT OF APPEALS IL it]: MAY 2 3 20:3 I . 17-" Dale W. Steager, West Virginia State Tax Commissioner, and David Sponaugle, Assessor of Doddridge County Respondents Below, Petitioners, ?D?r?lHl: unease whiff-11:" OF triplrti-(LS Salami?; - .. vs. No. 18?0125 Antero Resources Corporation, Petitioner Below, Respondent AMICUS CURIAE BRIEF ON BEHALF OF THE WEST VIRGINIA ASSOCIATION OF COUNTY OFFICIALS, INC. I. Your Amieus West Virginia Association Of Count}r Of?cials, Inc. (hereinafter WVACO) generally supports the position of the Petitioners West Virginia State Tax Commissioner and the Assessor of Doddridge County as presented in the Notice of Appeal ?led with the Court. II. KIND OF PROCEEDING AND NATURE OF THE RULING BELOW As to the subject January 17, 2018, Order of the Doddridge County Circuit Court, Business Division, styled 'This is to indicate, in conformity with the provisions of Rule that no counsel for a party to this appeal authored this brief in whole or in part, that no such counsel or a party made a monetary contribution speci?cally intended to fund the preparation or submission of this brief, and that no person other than the amicus curiae, its members, or its counsel made such a monetary contribution. IN THE WEST VIRGINIA SUPREME COURT OF APPEALS Dale W. Steager, West Virginia State Tax Commissioner, and David Sponaugle, Assessor of Doddridge County Respondents Below, Petitioners, vs. No. 18-0125 Antero Resources Corporation, Petitioner Below, Respondent AMICUS CURIAE BRIEF ON BEHALF OF THE WEST VIRGINIA ASSOCIATION OF COUNTY OFFICIALS, INC. SUPPORTING THE PETITIONERS AND REVERSAL Jack C. McClung (WVSB No. 2403) Attorney At Law 2026 Kanawha Boulevard, East Charleston, WV 25311 Telephone: (304) 346-0591 Email: iackmc@wvaco.org Counsel for Amicus West Virginia Association 01' County Of?cials, Inc. ORDER REVERSING THE DECISIONS OF THE DODDRIDGE COUNTY BOARD OF EQUALIZATION AND REVIEW AND THE DODDRIDGE COUNTY BOARD OF ASSESSMENT APPEALS UPHOLDING THE VALUATION OF GAS WELLS FOR THE 2016 AND 2017 TAX YEARS, WVACO adopts the description of the kind of proceeding and nature of the ruling below of the as stated in Paragraph 16 of the Petitioners? Notice of Appeal ?led with the Court on February 15, 2018. FACTS WVACO adopts the statement of facts as stated in the Petitioners? Notice of Appeal ?led with the Court. IV. RESPONSE TO ASSIGNMENT 0F ERRORS WVACO adopts and supports the Assigrunents of Error as stated in Paragraph 17 of the Petitioners? Notice of Appeal ?led with the Court. V. STANDARD OF REVIEW This case presents questions of statutory interpretation and application, and a determination of constitutionality, all of which are reviewed 3 m. VI. ARGUMENT A. The loss in revenue to cotton governments in West Virginia that would result from the upholding of the Antero decision would have significant. or even severe. negative ?nancial impact on manv counties of the State. The issue presented to the Court by this appeal is of utmost importance to county governments of the State is the signi?cant, or even severe, negative ?nancial impact that would be felt by many counties of the State by loss of gas well preperty tax monies they presently receive as 2 well as what they may have to pay back in the form of refunds to gas well companies if the Respondent Antero Resources Corpomtion were to prevail in this matter. The current impact of such property tax revenues on the counties of the State is illustrated by an April 12, 2018, letter from JeffAmburgey, Director of the Property Tax Division of the West Virginia State Tax Department, to the Assessors of the State that discussed the potential impact on tax revenue of the case under appeal. That said letter is ?led herewith as Exhibit A. The said letter, at page 2, states that ?[w]hile the Department has not determined the exact amount of exposure . . from the effect of the litigation on tax revenues, . . . it is estimated that the tax dollars at issue would be approximately 50% of the producing oil and gas property taxes in some counties." An attachment to the letter ?led herewith as Exhibit A displays the estimated tax revenue for each West Virginia county from ?Producing Oil Gas Taxes Tax Year 2017." In response to an inquiry from WVACO, certain affected counties provided communications describing the effect of such decreases in tax revenue on those counties. Selected excerpts from each such response are noted below, with selected communications attached as an exhibit to this brief. 1. Brooke County Estimated 2017 gasz?oil property tax revenue (front Exhibit A): $2,406,962 April 30, 2018 email from Thomas Oughton, Brooke County Assessor Selected Excerpts from the April 30, 2018, Brooke County email The county commission indicated that the anticipated reduction in tax revenues that would result from the change in appraised value of oil and gas wells will affect the capital improvements to the courthouse. 2. Harrison County Estimated 2017 gasr'oil property tax revenue (from Exhibit A): $8,664,680 April 30, 2018 email from William A. Parker, Harrison County Administrator Selected Excerpts from the April 30, 2018, Harrison County email The email noted that the majority of funding loss would impact the Board of Education and even the state (Big IF) ?nds a way to cover the reduction in local share via the school aid formula, school systems could still see a reduction on any levy funds.? The reduction in oil and gas tax revenues would require that the Harrison County Commission increase the tax burden on residential taxpayers - - senior citizens, etc., andi?or cancel capital projections or eliminate services. Due to the ever increasing court case-loads and the increasing safety or security concerns, Harrison County is in the planning stage for a judicial annex. This project may have to be cancelled if the ruling stands. Harrison County would experience a reduction in funding for Our Vital Service levy funds going to agencies such as: Harrison County Emergency Medical Services, Harrison County Senior Service Center Programs, Medical Health Service United Summit Center, Education Enrichment Programs, Harrison County Parks and Recreation Department, Nutritional Programs for Seniors via Bi-County Programs and other important services. 3. McDowell County Estimated 2017 gas/oil property tax revenue (from Exhibit A): $2,038,400 May 4, 201 8, letter from Michael D. Brooks, Commissioner, McDowell County Commission ?led as Exhibit to this brief. Selected Excerpts from the May 4, 2018, McDowell County letter McDowell County estimated in its letter that if the court ruling at issue . . . is allowed to stand, McDowell County would lose in excess of one million dollars each year.? The letter notes 4 that McDowell Countythe most economically depressed counties in the state, and the nation as a whole, and has been declared by the Appalachian Regional Commission as a distressed county for several years running.? The letter notes other losses in tax revenue being experienced by the county and describes the spending freeze, staff reductions in ?virtually every of?ce, including law enforcement . . ., and pay cuts that have been necessitated by deceasing tax revenues. As to the loss of revenue that would be seen by such reductions in gas well tax revenues, the letter states that while under the current circumstances of the county . . any loss in revenue has a signi?cant impact on the economy of the ecunty,? a decrease in revenue of this magnitude would be devastating and create great hardship for the county ultimately putting at risk many services provided to the citizens, including but not limited to, the education of our children, police protection, 91 and emergency services, ambulance services, the inability to maintain and repair county buildings, loss of additional jobs in both the education field and county government of?ces, additional reductions to employee wages and bene?ts, an inability to provide funding for agencies and organizations that are not constitutionally mandated . . . limit the county?s ability to apply for state and federal grant ?inds . . . [and] . . eventually affect the private sector as well, as people leave the county and state to seek gainful employment, further reducing ad valorem taxes, particularly on personal property.? 4. Marion County Estimated 2017 gasfoil property tax revenue (from Exhibit A): 113,505 April 30, 2018 email from Kris Cinalli, Marion County Administrator Selected Excerpts from the April 30, 2018, Marion County email I fear that Marion County would lose invaluable revenues that could impact our county?s operating capital. If this decision impacts the General Fund Revenue, it would be very detrimental to our county and our ability to operate on a day-to-day basis without increasing taxes somewhere to make up for the shortfall.? 5. Marshall County Estimated 2017 gasfoil property tax revenue (from Exhibit A): $10,240452 April 27, 2018 email from Jan Pest, Marshall County Clerk Selected Excerpts from the April 27, 2018, Marshall County email If all companies were assessed by the method advocated by the companies, ?we estimate the loss in tax revenue would be $2,000,000 County; $6,000,000 BOE, based on what is currently on the books. Anything new would be assessed by the new method.? 6. Richie County Estimated 2017 gasfoil property tax revenue (from Exhibit A): 871,130 May 1, 2018, email from Arlene Mossor, Richie County Assessor Selected Excerpts from the May 1, 2013, Richie County email . . . [l]f the decision of the business court stands . . . they [the county commission] would not be able to go ahead with the purchase of a building for the family court. They are not certain what it would do in future years. 7. Tyler County Estimated 20H gasfoil property tax revenue (from Exhibit A): $5,035,094 Undated memorandum from Jackson L. Hayes,. Assessor of Tyler County, ?led as Exhibit to this brief. Selected Excerpts from the Tyler County memorandum The Tyler County memorandum was described as one . . . addressing the issue of equity and fairness in oil and gas appraisals.? The memorandum describes the process used ?early in the gas boom? by which ?the oil and gas companies and the state tax department? developed a methodology for appraising gas wells, and noted the increase later in the process of the ?base amount ofdeduction? from $150,000 to $175,000. The memorandum notes the writer?s belief that . . . if you give unlimited deductions you take away the incentive for companies to improve their operations therefore lowering deductions" and that companies instead? . . . continue to increase their deductions amounts to guarantee their pro?ts at the expense of others. Not goal oriented.? As to the gas company deductions, the Tyler County memorandum notes that ?companies take these deductions prior to their appraisement and also take deductions from the royalty owner?s checks, thereby taking from the tax payers twice.? As to the effect of the subject loss of tax revenue on Tyler County, Assessor Hayes states that ?[s]chool systems budgets will be reduced,? that there would be a cut in county projects that would include cuts to infrastructure items and funding to ?[t]hings that have needed funding for years and that the grant system has failed? noting in particular that ?Fire and EMS have been over-burdened with Well associated accidents? that have put ?extra cost on the county.? The memorandum notes that several projects now in the evaluation stage ?would be scrapped, budgets of all county entities adjustedflowered, making for a stagnant operation at the county level and no improvement to the overall economy." The memorandum also describes some of the negative effects of the gas industry on some residential real estate values and states that ?If we don?t have monies for infrastructure, we lose revenue from loss of people (lower tax base). 8. Wetzel County Estimated 201? gasfoil preperty tax revenue {from Exhibit A): $15,138,399 May 4, 2018, letter from Lawrence P. Lemon, President, TWetzel County Commission, ?led as Exhibit to this brief. May 7, 2018, letter from Jeff Lancaster, Chief Business Of?cial, Wetzel County Schools, ?led as Exhibit to this brief. Selected Excerpts from the May 4, 2018, Wetzel County Commission letter The Wetzel County Commission letter noted that, according to the calculations of the Wetzel County Assessor, the county could . . potentially lose $2,721,800 in ad valorem taxation revenue . . if the Antero decision is upheld by this Court. That loss in revenue was described in the letter as . . . detrimental to the Wetzel County Cemmission?s budget.? The letter noted that As a result of such a drastic change in revenue, we will have to make budget cuts to the constitutional of?ces in Wetzel County. These budget constraints will cause a negative impact on law enforcement needs in Wetzel County. The likelihood exists that the Wetzel County may have to decrease personnel within the of?ce. The impact will be severe in Wetzel County as it relates to law enforcement. Wetzel County has already lost their West Virginia State Police Detachment in Hundred WV. The Wetzel County letter then describes the negative impact of such budget cuts on the Of?ce of the Wetzel County Prosecuting Attorney, on the level of technology and customer services in the county, and on staf?ng levels of the of?ces of the Assessor and the County Clerk. The Commission letter then notes that?. . . if our budget declines by the referenced dollar amount, we could be in the ?nancial position to not be able to provide the continued support we have given in the past . . . to the nine volunteer ?re companies and four Emergency Medical Services stations in Wetzel County. The Wetzel County Commission letter closes as follows: We plead with the Honorable Justices to examine the record and detrimental impact this ruling this ruling may have on Wetzel County and other producing oil and gas counties. Selected Excerpts from the May 2018, Wetzel County Schools letter The Wetzel County Schools letter notes that . . . [b]ased on the numbers given me by the Wetzel County assessor, the decline in Class 111 Personal Pmperty would result in an annual decrease to our Excess Levy collections of approximately $4,108,294. In addition, our regular levy revenues would go down by roughly $3.5 million which would result in the state picking up that portion of the loss in revenue in the state school funding formula. The letter notes that ?[t]he estimated $4 million loss in Excess Levy collections would require major changes to our school system.? As to the levy revenue, the letter states that Our levy provides instructional materials, technology allocations, capital improvements to our school buildings, funding for our academic and athletic trips, physical and occupational therapy for our special education students, funding for four public libraries, maintenance of our school bus ?eet, assistance to feed all our students breakfast and lunch, an ACT preparation and incentive plan, and school resources? of?cers in all attendance areas. All or most of these items above would suffer if we were to see an annual $4 million decrease in revenue. The Wetzel Schools letter also notes the potential impact on educational personnel pay scales by such a decrease in revenue. The letter notes that Wetzel County . . . recently increased its salary and bene?ts package to be more competitive . . and that ?If our revenue were to drOp, it is highly unlikely that we would be able to maintain those salary package increases, and many of our employees would be looking for anotherjob elsewhere.? The letter notes that ?Ultimately, the big loser in this situation would be Wetzel County students.? The Wetzel Schools letter concludes with a request that the Honorable Justices of this Court examine the . . . detrimental impact this ruling may have on Wetzel County and other producing oil and gas counties. 9. Wyoming County Estimated 201? gasfoil property tax revenue (from Exhibit A): $1,110,703 May 2, 2018, letter from Jewell L. Aguilar, Wyoming County Clerk, ?led as Exhibit to this brief. Selected Excerpts from the May 2, 2018, Wyoming County letter The Wyoming County letter states that it . . . it appears that the counties in our state are likely to lose ?fty-percent of our revenue if this decision stands,? and notes that A loss of over one-half million dollars to Wyoming County would in fact be more devastation from the oil and gas industry that has decimated our county since 2011.? The letter notes that Wyoming County government has already made as many cuts as possible due to the downfall of the economy in Southern West Virginia. Wyoming County can no longer help provide funding for outside agencies and community organizations as they did in years past. We currently struggle to balance our budget while providing quality services to the residents of this county. If this decision is not overturned, the decrease in revenue could certainly adversely affect the operation of our constitutional of?ces in Wyoming County, possibly resulting in loss of jobs and services. VII. CONCLUSION Based On the matters and arguments presented herein and other matters of record, the ORDER REVERSING THE DECISIONS OF THE DODDRIDGE COUNTY BOARD OF EQUALIZATION AND REVIEW AND THE DODDRIDGE COUNTY BOARD OF 10 ASSESSMENT APPEALS UPHOLDING THE VALUATION 0F GAS WELLS FOR THE 2016 AND 2017 TAX YEARS issued by the Circuit Court of Doddridge County, Business Decision, on January 17, 201 8, should be reversed and the appeal of the Petitioners Dale W. Steager, West Virginia State Tax Commissioner, and David Sponaugle, Assessor of Doddridge County, should be granted. Respectfully Submitted, Amicus West Virginia Association Of County Of?cials, Inc. By counsel: ?45k C. McClung (WW 2403) ttorney At Law 2026 Kanawha Boulevard, East Charleston, WV 25311 (304) 346-0591 11 EXHIBITS A - Exhibit A Dave Hardy "n - .- Dale W. Steager Secretary of Revenue - State Tax Conunissioner STATE TAX DEPARTNIENT April 12, 2018 TO ALL COUNTY ASSESSORS STATE OF WEST VIRGINIA Dear Assessors: Re: Oil Gas Valuations The mass appraisal methodoloy for valuing producing gas wells for property tax pmpooee is set forth in Legislative Rule 110 CSR Series 11. As one ofthe valuation variables set forth in the Rule, the State Tax Department, Property Tax Division, annually calculates Average Annual Industry Operating Expenses in compliance with general authority set forth in 110-1143l ofthe Rule. After assembling surveyed data, pursuant to the Legislative Rule, operating expense limitations are imposed annually by issuing an Administrative Notice which is published in the State Register. For the 2017 tax year, the limitations were as follows: ?Direct ordinary operating expenses will be estimated to be 45% of the gross receipts derived from gas production, not to exceed $5,000, 35% of gross receipts derived from oil production. not to exceed $5,750, and 35% of the gross receipts derived from enhanced recovery oil wells, not to exceed $9,000. In 2014, the Tax Department also received responses from a survey speci?cally for Marcellus and horizontal wells other than Marcellus. Utilizing that information, the Tax Department developed the following criteria for Marcellus wells and horizontal other than Marcellus wells. For Marcellus vertical wells, the maximum operating expenses allowed is 30% of the gross receipts derived from gas production, not to exceed $30,000. For Marcellus horizontal wells the mardrnurn operating expense allowed is 20% of the gross receipts derived from gas production, not to exceed 3175000. For horizontal, other than Marcellus, the maximum operating expenses allowed is 30% not to exceed 14.4. Average deciliter-ates. theaverage 3 Administrative Notice 2017-03, Property Tax State Tax Commissioner?s Statementforthe Determination ofOil and GasCqu'atingExpenses 1 10m 1143,15auedlanuary26, 2017. MTIIW 1124 Smidr Street. NJ. museum? WV WEE Telephone Elli-55313940 Fl: 304-558-136 TO ALL COUNTY ASSESSORS STATE OF WEST VIRGINIA April 12, 2018 Page Two The ?not to armed? provision in the valuation methodology (also commonly referred to as the ?cap?? was deemed to result in unequal and non-uniform taxation for both traditional and Marcellus wells in several recent Orders issued by Judge Wilkes of the West Virginia Business Conn. The State Tax Department has appealed those Orders to the We? Virginia Supreme Court of Appeals. The Administrative Notice for the 2018 tax year wasissued January 30, 2018 and provides identical operating expense limitations (ADMDKISTRATIVE NOTICE 2011MB). This likely will be a contentious issue before the County Commissions [sitting as Boards of Assessment Appeals) in October of this year. The State Tax Department will vigorously defend its operating expense allowance; however, signi?cant tax dollars will likely be at stake in oil and gas producing cotmties. While the Departrnerit has not determined the exact amount of expostne, it is estimated that the tax dollars in issue could be approximately 30% of the inducing oil and gas property taxes in some counties. Attached for your review is a listing of the estimated producing oil and gas taxes for Tax Year 2017. Should you have questions or need additional information concerning this matter, please contact Cindi Hoover at 304-558-3940 or C1_n' Property Tax Division JAfaj Attachment co: Cindi Hoover, Tax 8; Revenue Manager Property Tax Division ?nd :1ng Tue: ma 834,23? IEHELEY 0 Wm 110.95: mm CAIELI. 333.543 ELM 251.51 mm 15m: 141.23mm" 613.35? mm mm ?3.221 mm 1.335.515 1.9mm 3.113.505 10.30.62 MASON mm mm MERCER Wm Mn 15 MEI-GO 1.391.557 0 mm 74 HIM 51.? OHIO 7.593.936 PERM ?58 am 1.1439} mm 22 mun 1.41.615 mm 55?.?16 555.337 WE 5.371.139 EDI-HE 151,533 men: ?55 TUCKER 17.230 TYLER 5M mm H.655 755 WHEEL 15.133355 mm mm WOOD 123.711 WYOMING mm Dad-1m ham-mm? mmkmamNIn-rmm?mch? Exhibit ?atom McDowell County Commission mdm, age-era me 109 Wyoming Street Watch, West Virginia 2480! Team? Phone: (304) 436-8548 Fax: (304)-436-85 72 May 4, 2013 Mr. Jack McClung, Legal Counsel WV Association of Counties 2026 Kanawha Boulevard, East Charleston, WV 2531] Dear Mr. McClung This correspondence is in reference to ad valorem tax valuations on oil and gas wells in McDowell County. It is our understanding that the WV Supreme Court has ruled these values to be inaccurate or otherwise invalid. Our records indicate that the valuations of $2,038,400.00 reported by the state are in fact accurate and valid. If the WV Supreme Court ruling is allowed to stand, McDowell County would loose in excess of one million dollars each year. In addition McDowell County stands to lose approximately $100,000.00 in additional ad volarern taxes as a result of Northfork and Southern Railway removing its equipment from the county as well as a continual loss of revenue resulting from a declining population. McDowell County, is one of the most economically depressed counties in the state, and the nation as a whole, and has been declared by the Appalachian Regional Commission as a distressed county for several years running. The County has been under a spending freeze for approximately three years, with only the necessary supplies and equipment purchased and urgent repairs to equipment and buildings being completed. In addition staff has been reduced signi?cantly in virtually every of?ce, including law enforcement, and the remaining employees have taken a 10% pay out, which has only recently been matured temporarily based upon a month-to-month re-evaluation of county ?nances. Consequently, any loss of income has a signi?cant impact on the economy of the county, but a decrease in revenue of this magnitude would be devastating and create great hardship for the county ultimately putting at risk many services provided to the citizens. including but not limited to, the education of our children, police protection, 9H and emergency services, ambulance service, the inability to maintain and repair county buildings, loss of additional jobs in both the education industry and county government of?ces, additional reductions to employee wages and bene?ts, an inability to provide funding for agencies and organizations which are not constitutionally mandated. Furthermore, the loss of income would limit the counties ability to apply for state and federal grant funds as the county would be unable to provide the required cost share matches. Eventually, the loss of services and jobs would affect the private sector as well, as people leave the county and state to seek gainful employment, further reducing ad valorem taxes, particularly on personal property. ?aw-W? Michael D. Brooks, Commissioner McDowell County Commission ?aw-W? Michael D. Brooks, Commissioner McDowell County Commission Exhibit JACKSON L. HAYES ASSESSOR OF TYLER COUNTY P.O. BOX 2 Middlebourne, WV 26149 To Whom It May Concern: (304} 'i'53-47B1 I am addressing the issue of equity and fairness in oil and gas appraisals. After setting down with oil and gas companies and the state tax department early in the gas boom a methodology was developed for appraising these wells. Later in the process the base amount of deduction was evaluated and increased, to the current $175,000.00 cap per well. I believe if you give unlimited deductions you take away the incentive for companies to improve their overall operation therefore lowering deductions. They continue to increase their deductions amounts to guarantee their profits at the expense of others. that goal oriented. Also companies take these deductions prior to their appraisement and also take deductions from the royalty owner?s checks, therefore taking from the tax payers twice. Things this would effect in Tyler County: 1. School system budgets will be reduced?possible lowering their budget monies to the point they would apply for State assistance, where is that money to come from? We could barely make a 5% pay raise increase to school teachers. Do you want counties to be in this situation also? 2. Cut in County projects: infrastructure items: water, broadband, upgrades to county properties, annex, parking for county and court, funding ofambulance, fire, and school levies, upkeep to fair grounds and 4H cam p, library?s. Things that have needed funding for years and that the grant system has failed. Fire and EMS have been over burdened with Well associated accidents extra cost on county. 3. As people sell out to oil companies, than our people leave. We need to develop lands for living, farming, tourisms, etc. Some housing has lost value because of pipeline, compressing stations, and wells being positioned by their homes, Realty companies can't sell them and won?t list them because of liability. If we don?t have monies for infrastructure, we lose revenue from loss ofpeople (lower tax base). 4. Several projects are in the valuation stage these would be scrapped, budgets of all county entities adjusted! lowered, making for a stagnant operation at the county level and no improvement to the overall economy. Thanks, Qacfeom at, Horacio, Tyler County Assessor Mai. 4.201811232AM threl Co. Assessor No.0698 P. 2 Exhibit WETZEL COUNTY OWSION NEW WV 26155 CAROL S. HAUGHT P. LEMON, PRESIDENT SESSIONS: CLERK NEW MMSVELB, 26155 15% JAN 1? APR. LISA L. BEA-SLEY, VICEPRESIDENT 3? TUES IUL NEW MWLE, WV 26155 I"?r TUBS OCT PD. 301156 ROBERT L. GORBY. COWSSIONER TELEPHONE: NEW WV NEW MARTINSVILLE. WV 26155 [304) 455-5224 26155 FAX: [304} 455-5156 May 4, 2013 West Virginia Association of Counties do: Mr. Jonathan Adler, Executive Director 2026 Kanawha Charleston WV 25311 RE: Third Judicial Circuit Steagerv. Antero Resources Case No. 13-0125 Ladies and Gentlemen: We asked our assessor, Scott Lemley, to calculate the potential impact the change in valuation that will occur in the event the West Virginia Supreme Court Justices uphold the ruling from the Third Judicial Circuit [Steager v. Antero Resources Case No. 18-0125). The levy page for the regular expense levy for 2013-2019 had a total valuation for Class Personal Property at $951,678,331 the potential change in valuation, Mr. Lemley calculated the potential assessed valuation for the 2019-2020 estimated at $436,839,168. According to current levy rates, our revenue could potentially change from $5,443,600 to This is the revenue calculated from Class lil Personal Property Valuation. . As the numbers reflect, we could potentially lose $2,721,800 in ad valorem taxation revenue from Class ill Personal Property. This loss in revenue will be detrimental to the Wetzel County Commission?s budget. As a result of such a drastic change in revenue, we will have to make budget cuts to the constitutional of?ces in Wettel County. These budget constraints will cause a negative impact on law enforcement needs in Wetzel County. The likelihood exists that the Wetzei County Sheriff's Department may have to decrease personnel within the of?ce. The impact will be severe in Wettel County as it relates to law enforcement. Wetzel County has already lost their West Virginia State Police Detachment in Hundred WV. The Wettel County Prosecutor? 5 Office will have to prosecute crimes with less resources. As the case load increases concerning criminal acts in Wetzel County, the prosecutor will have to perform more duties with, potentially, less employees and the needed resources to effectively prosecute criminal cases in Wetzel County. We know the stress and workload could have a detrimental impact on the May. 4.2018 Weizei Cs. Assessor No.0698 P. 3 Wetzel County Prosecutor?s Of?ce. The Wetzei County Circuit Clerk's Office?s budget could potentially decrease,- as a result, this will have an impact on the court proceedings in Wetzel County. The Commission has been in discussion concerning employing at least three individuals for Wetzel County Courthouse and Magistrate Court security. These new positions will require additional funding from the Commission's budget. Several of our offices have advanced in technology in regard to offering more information and resources online. As a result, we have better served our communities by offering many of the Wetzei County Clerk?s documents online, as well as documents and maps of the Wctzei County Assessor?s Office. With the advances in technology, we have to maintain this softwareand other hardware on an annual basis. if the budget is drastically decreased, the potential exists where we will not be able to continue providing the level of customer service we are currently providing our citizens and taxpayers. The assessor?s office and the county clerics office may have to red staff. Finally, the Wetzel County Commission has been ?nancially supporting all nine volunteer ?re companies in our County, and we have been ?nancially supporting our Wetzel County Emergency Medical Service (EMS). Our Wetzel County EMS has four stations in our County. Ifour budget deciines by the above referenced dollar amount, we could be in the ?nancial position not to be able to provide the continued sopport we have given In the past. We plead with the Honorable Justices to examine the record and detrimental impact this ruling may have on Wetzel County and other producing oil and gas counties. Sincerely, Lawrence P. Lemon Wetzel County Commission President WETZEL COUNTY SCHOOLS Exhibit 333 Foundry Street New Martinsville, 26155 Telephone (304) 455-2441 Fax No. (304) 455-3446 - May 7, 2013 West Virginia Association of Counties Mr. Jonathan Adler, Executive Director 2026 Kanawha Charleston WV 25311 RE: Third Judicial Circuit Steager v. Antero Resources Case No. 18?0125 Ladies and Gentlemen: I have been asked to calculate the potential impact the change in valuation that will occur in the event the West Virginia Supreme Court Justices uphold the ruling from the Third Judicial Circuit {Steager v. Antero Resources Case No. 13-0125). The impact on Wetzel County Schools would be quite substantial. Based on the numbers given to me by the Wetzel County assessor, the decline in Class Personal Property would result in an annual decrease to our Excess Levy collections of approximately $4,108,294. in addition, our regular levy revenues would go down by roughly $3.5 million which would result in the state picking up that portion of the loss in revenue in the state school funding formula. The estimated $4 million loss in Excess Levy collections would require major changes to our school system. In December of 201?, the voters in Wetzel County ovenivhelmingly passed our Excess Levy with 89.5% of the voters voting for the levy. I believe that the major reason for the high percentage is that our voters want to keep our small schools, and there is no way this would be possible in Wetzel without the Excess Levy and the oil and gas boom in our area. in fact, a plan was moving forward to close Paden City High School right before the Marcellus boom hit Wetzel County and changed our ?nancial situation. Our levy provides instructional materials, technology allocations, capital improvements to our school buildings, funding for academic and athletic trips, physical and occupational therapy for our special education students, funding for four public libraries, maintenance of our school bus fleet, assistance to feed all students breakfast and lunch, an ACT preparation and incentive plan, and school resource of?cers in all attendance areas. All or most of these items above would suffer if we were to see an annual $4 million decrease in revenue. in addition, we have relied on the stream of oil and gas revenue in Wetzel to attract employees to our area. We have consistently been on the low end of the pay scale compared to most of our neighboring counties and thus have lost employees to those counties. Based on the trend in revenue, Wetzel has recently increased its salary and bene?ts package to be more competitive, and families have moved here for employment. If our revenue were to drop, it is highly unlikely that we would be able to maintain those salary package increases, and many of our employees would be looking for another job elsewhere. Ultimately, the big loser in this situation would be Wetzel County students. We plead with the Honorable Justices to examine the record and detrimental impact this ruling may have on Wetzel County and other producing oil and gas counties. Sincerely, #1475: Jeff Lancaster Chief School Business Official, Wetzel County Schools Exhibit}? in County Comm,- . R0. Box 309 ?Sewing the citizens of Wyoming Conny" L- Admit?? Pbtm'?e, WV #374 County Clerk Telephone 3 04- 73 Teleph on is 304?232-3900 ?11301 Frau 304-732-9659 Fm: SIM-7324603 Jason Mullins Silos Milling Jr. Dr. Samuel Muscori, Sr. Commissioner President Commissioner May 3, 2018 Mr. Jack McClung, Legal Counsel WV Association of Counties Charleston, WV 25305 Mr. McClung: lam sending this correspondEnce in reference to the ad valorem tax valuation on gas a oil wells in West Virginia. It is my understanding that the WV Supreme Court has ruled that these valuations are invalid or inaccurate. It appears that the counties in our state are likely to lose fifty-percent of this revenue if this decision stands. After consulting with our county Assessor, Mike E. Cook, he diligently researched this information and made calculations based on our county ad vaiorem tax. Our Assessor con?rms that the figures reported by the WV State Tax Department of $1,110,000.00 for estimated revenue on these gas wells are correct. A loss of over onewhalf million dollars to Wyoming County would in fact be more devastation from the oil 8: gas industry that has decimated our county since 2011. in tax year 2010, our county had I $588,739,485.00 in appraised preperty compared to $52,796,210.00 in tax year 2013. All of this obviously as a result of the Marcellus Shale in the Northern part of West Virginia, as indicated on the attached chart provided by the Assessor?s Office. Our school system has already lost many teacher and service personnel positions and yet another decrease in revenue would only cause greater hardship and ultimately our children?s educations will suffer. Wyoming County government has already made as many cuts as possible due to the downfall of the economy in Southern West Virginia. Wyoming Coonty can no longer help provide funding for outside agencies and community organizations as they did In years past. We currently struggle to balance our budget while providing quality service's to the residenu of this county. if this decision is not overturned, the decrease in revenue could certainly adversely affect the operation of our constitutional of?ces in Wyoming County, possibly resulting in loss ofjobs and services. Thank you for your consideration in this matter, any help you can provide to the people of Wyoming County and the State of West Virginia would be greatly appreciated. . Very rulyyours, Je ell Aguilar, oming County Clerk IN THE WEST VIRGINIA SUPREME COURT OF APPEALS Dale W. Steager, West Virginia State Tax Commissioner, and David Sponaugle, Assessor of Doddridge County Respondents Below, Petitioners, vs. No. 18-0125 Antero Resources Corporation, Petitioner Below, Respondent CERTIFICATE OF SERVICE 1, Jack C. McClung, counsel for West Virginia Association of County Of?cials, In, hereby certify that a true copy of the foregoing MOTION FOR LEAVE TO FILE BRIEF AS AMICUS CURIAE ON BEHALF OF THE WEST VIRGINIA ASSOCIATION OF COUNTY OFFICIALS, INC, and the foregoing AMICUS CURIAE BRIEF ON BEHALF OF THE WEST VIRGINIA ASSOCIATION OF COUNTY OFFICIALS, INC, was served upon counsel of record by depositing atrue copy thereof in the United States Mail, ?rst?class postage prepaid, this 23rd day of May, 2018, addressed as follows: L. Wayne Williams, Esq. Assistant Attorney General 1900 Kanawha Boulevard, East Building 1, Room W-435 Charleston, West Virginia 25305 Counsel for Petitioners West Virginia Tax Commissioner and Assessor of Doddridge County Craig A. Grif?th, Esq. John I. Meadows, Esq. Steptoe 85 Johnson, PLLC P.O. Box 1588 Charleston, WV 25326-1588 Counsel for Respondent Antero Resources Corporation .