property tax protests
A package of bills this legislative session look to solve the issues ad valorem tax protests by oil, gas and wind companies present to school districts in the state. (Michael Duncan)

A package of bills being considered this legislative session aims to address the instability school districts, various county resources and the state’s energy industry face owing to property valuation disputes between county assessors and energy companies.

“Anybody, everybody, whether you’re an individual or corporation who owns a wind farm, has the right to protest their taxes,” said Rep. John Pfeiffer (R-Orlando). “Most of the residential stuff gets solved in an informal process. The stuff that gets done in court is pipelines, wind farms and things like that.”

Valuation disputes with petroleum and renewable energy companies can sometimes take years to settle, and county treasurers are currently holding about $80 to $90 million in escrow, which can’t be apportioned to school districts or other county resources, such as fire departments, law enforcement agencies, libraries and health departments.

Noble County Assessor Mandy Snyder said about $2.4 million is currently tied up in escrow in her county alone. She participated in an interim study in September that analyzed the issue of ad valorem protests and had conversations with Pfeiffer, Rep. Dick Lowe (R-Amber), Rep. Kenton Patzkowsky (R-Balko) and Rep. Carl Newton (R-Cherokee) as they prepared bills for this legislative session.

“I think the goal is, how do we make real change that’s not just on paper and is really going to change the process?” Snyder said. “I think some of the bills out there right now have really great potential. Some of them not so much.”

Sen. John Michael Montgomery (R-Lawton), Sen. Roland Pederson (R-Burlington) and Sen. Zack Taylor (R-Seminole) co-authored a few of the measures.

“Honestly, this seems more like a northern part of the state issue at this point in time, but I do have some wind farm developments that have come in over the years,” Montgomery said. “I would fully expect, at some point, that could be an issue [for] some counties to the north of me that are right outside of my district. Based on that growth in that area, I have concerns about when it’s going to come to my neck of the woods and become more of an issue.”

‘They just want to pay a fair tax’

education bills
From left to right, House Commons Education Vice Chairman Mark Vancuren (R-Owasso), Rep. Dick Lowe (R-Amber) and Chairwoman Rhonda Baker (R-Yukon) listen to discussion on HB 2673 on Tuesday, Feb. 23, 2021. (Tres Savage)

Lowe said there are protests in his county, Grady County, that have been going on for seven years.

“Our companies are not against paying their taxes,” Lowe said. “They just want to pay a fair tax.”

Although its title has been stricken, HB 4413, authored by Lowe and Montgomery, could prohibit third-party assessors from participating in valuation negotiations, protests or appeals with county assessors. However, third-party assessors may still participate in the conversation surrounding the valuation assessment of a piece of property.

Energy companies have expressed concerns over the use of third-party assessors by elected county assessors in the state and have taken particular issue with Total Assessment Solutions Corp., which contracts with 46 of the state’s 77 counties.

“It takes [third-party assessors] out of the process of making agreements,” Lowe said. “It doesn’t take a third-party [out fully]. Just not (in) negotiations or settlements.”

Snyder expressed concerns over HB 4413, saying that third-party assessors are useful in helping to value extremely technical pieces of property commonly found in the energy industry, such as the blades on wind turbines.

“I think that’s worrisome. I think we need to look at that one a little more,” Snyder said.

She said TASC is knowledgable regarding heavy equipment valuation and can understand and “speak the same language” as tax representatives for energy companies.

“That’s the thing I keep stressing. If this bill passes, I’m going to be expected to sit at that table and answer questions,” Snyder said. “But I’m going to be discussing it, nine times out of 10, with the company’s tax representative, which is a third-party for the company.”

Lowe said he believes his HB 4414, co-authored with Pederson, could help assessors fill in knowledge gaps for county assessors.

HB 4414 would require county assessors to receive an advanced accreditation, which includes the completion of six academic units over the topics of:

  • appraisal procedure;
  • valuation of personal property;
  • valuation of agricultural property;
  • mass appraisal procedures;
  • cadastral mapping and;
  • valuation of energy producing property including, but not limited to, wind, oil and gas property.

Snyder said she believes HB 4414 has great intentions, but she said she doesn’t know if it would work in real-world application. She said individuals already have to be accredited to work in the assessor’s office and that they learn the approaches to value — cost, sales and income — during those initial accreditation classes.

Snyder said those three approaches are used to value all types of property, whether the property is a home, beauty shop or wind farm.

“Lowe’s idea is to add an additional class to our required accreditation that would be solely for energy: wind, oil and gas. I’ve even heard maybe some solar,” Snyder said. “While we are 100 percent behind any kind of education that we can get, that class is still going to teach the three approaches that we’ve already learned. Not every county in Oklahoma has energy. Why would you force a class on an assessor, which is going to cost the county money?”

‘We have somewhere between $80 and $90 million sitting in escrow as cases drag on’

Oklahoma legislators
Rep. John Pfeiffer (R-Orlando) and Rep. Rusty Cornwell were among 46 incumbent Oklahoma legislators re-elected by default in 2020. Rep. Johnny Tadlock, in back, did not seek re-election. (Michael Duncan)

HB 3901, authored by Pfeiffer and Montgomery, has a goal of shortening protest timelines by moving ad valorem valuation appeals of $3 million or more from district courts to the existing Court of Tax Review in hopes of settling them within the same calendar year.


Oklahoma property tax protests

‘Instability’: Hundreds of Oklahoma property tax protests leave schools in limbo by Megan Prather

“We’ll certainly have to look at how that will play out on the budget. I’m sure there will be costs to doing something like that,” Montgomery said. “I think, at the end of the day, it’d be very helpful for our school districts if we can expedite this process and get these protests knocked out and dealt with a little bit quicker to unlock that money and get it out there.”

The Court of Tax Review currently hears protests from public service companies such as OG&E, AT&T and Burlington Northern Railroad.

“We’re working with the court system to figure out how we kind of scale this up to handle all these cases so we can hopefully clean up the backlog we have,” Pfeiffer said. “Right now, we have somewhere between $80 and $90 million sitting in escrow as cases drag on, some five to seven years. If we can move them to one place and, hopefully, find some people whose job is dedicated to establishing some precedent and resolving these cases, we can speed this issue up.”

Snyder said HB 3901 shows a lot of promise. However, while the County Assessor Association of Oklahoma is supportive of the bill, she said assessors are concerned over the unknowns, such as where the judges will come from.

“Right now, if we go to district court with a protest, we’re in the same court with murderers, rapists and other criminal cases,” said Snyder, who serves are chairwoman of the County Assessor Association of Oklahoma’s legislative committee. “When a judge is looking at these types of cases and sees an ad valorem case, it doesn’t get a lot of priority. Nor should it.”

Snyder said she is also supportive of HB 3820, authored by Newton and Taylor, which would allow county assessors throughout the state to communicate and share documents to establish property valuations.

“It would still not be for public record,” Snyder said. “But we could communicate within counties to say, ‘Let’s talk about how we’re valuing this time,’ and I think that would be extremely beneficial for us.”

Another bill authored by Lowe and Pederson, HB 4415, would impact a taxpayer’s protest if they fail to file the required forms by siding with the county assessor’s valuation.

“The devil’s in the details on how we decide these things, but nobody wants these [protests] dragging on for the time period that they are,” Pfeiffer said. “The schools want their money, and so do the counties. The companies want the valuations settled so they know how to budget their taxes for the next couple of years. Everybody wants it done, and that’s where we’ve really been able to move this forward a lot this year.”

HB 3820, HB 4413, HB 4414 and HB 4415 passed the House and are scheduled to be heard in the Senate Finance Committee this morning. HB 3901 advanced through the Senate Finance Committee last week with its title and enacting clause stricken. Those procedural actions typically indicate that lawmakers and associated interests are still working to find an agreement over specific language in a bill.