BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, : ORDER
v. : Appeal No. 93-0969
PROPERTY TAX DIVISION OF THE :
UTAH STATE TAX COMMISSION, :
Respondent. : Tax Type: Centrally Assessed
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a Settlement Conference pursuant to the provisions of Utah Code Ann. §59-1-502.5, on XXXXX. G. Blaine Davis, Administrative Law Judge, heard the matter for and on behalf of the Commission. Present and representing Petitioner on the telephone was Mr. XXXXX. Present and representing Respondent were Ms. XXXXX, Assistant Attorney General, together with Mr. XXXXX, Mr. XXXXX, and Mr. XXXXX. Present and representing the affected counties was Mr. XXXXX of the law firm, XXXXX, together with Mr. XXXXX.
The issue in this proceeding is the fair market value of the subject property as of XXXXX.
The Property Tax Division of the Utah State Tax Commission originally valued the subject property at $$$$$.
At the Settlement Conference, Petitioner did not present an appraisal of the property. Instead, Petitioner represented that the primary disagreement was with one well, i.e., XXXXX. With respect to that well, he represented that the company had spent $$$$$ doing a workout on the well and increasing it's production, and that as a result of the workout, the production of the well for the last few months was abnormally high, whereas in a very few short months the well was producing significantly less oil than it was immediately after the workout was completed. However, Petitioner did not have an appraisal of that single well.
Respondent had received additional input and information from Petitioner, and based upon that information had prepared a revised appraisal of the property. That revised appraisal did reduce the total value down to $$$$$. The Respondent's appraisal, for XXXXX was based upon a year-end production of 1,400 barrels of oil per month, so that the value was based upon the production as of the lien date.
Petitioner had submitted three comparable wells to Respondent, and Respondent had utilized those comparable wells and had determined that it's reduced appraisal was a correct value for the property based upon the factors which were in existence as of the lien date. The Respondent acknowledges that later during the year XXXXX, the oil production reduced substantially, but the position of Respondent is that the reduced value in the later year would impact the value for the succeeding year, XXXXX. In fact, part of the argument of Petitioner was that the substantially reduced value for XXXXX showed that the well did not have such a substantial value for XXXXX. However, as of the lien date in question, the projection of Respondent appears to be correct and appears to be a reasonable fair market value.
Petitioner has the burden of proof to establish that the value placed on the property by Respondent is erroneous, and also has the burden of proof to show a correct value for the property. Petitioner has failed to sustain either of those burdens of proof.
DECISION AND ORDER
Based upon the foregoing, the Tax Commission finds that the market value of the subject property as of XXXXX, is $$$$$, with that value being allocated $$$$$ to XXXXX County, $$$$$ to XXXXX County, and $$$$$ to XXXXX County. The County auditor of each of the above referenced counties is hereby ordered to adjust its records in accordance with this decision. It is so ordered.
This decision does not limit a party's right to a formal hearing. However, this Decision and Order will become the Final Decision and Order of the Commission unless any party to this case files a written request within thirty (30) days of the date of this decision to proceed to a Formal Hearing. Such a request shall be mailed to the address listed below and must include the Petitioner's name, address, and appeal number:
Utah State Tax Commission
210 North 1950 West
Salt Lake City, Utah 84134
Failure to request a Formal Hearing will preclude any further administrative action or appeal rights in this matter.
DATED this 5th day of April, 1995.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer