Brenda J. Whetzel v. Matthew R. Irby, in his official capacity as State Tax Commissioner of West Virginia

IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA FILED June 27, 2025 BRENDA J. WHETZEL, ASHLEY N. DEEM, CHIEF DEPUTY CLERK Petitioner Below, Petitioner INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA v.) No. 24-ICA-370 (W. Va. Office of Tax Appeals Docket No. 23-1361) MATTHEW R. IRBY, IN HIS OFFICIAL CAPACITY AS STATE TAX COMMISSIONER OF WEST VIRGINIA, Respondent Below, Respondent MEMORANDUM DECISION Petitioner Brenda J. Whetzel appeals the August 15, 2024, Final Decision of the West Virginia Office of Tax Appeals (“OTA”) that affirmed the valuation by the State Tax Commissioner of West Virginia of Ms. Whetzel’s oil and gas interests in Marshall County, West Virginia. Respondent Matthew Irby filed a response in his official capacity as State Tax Commissioner of West Virginia (“Tax Commissioner”).1 No reply was filed. This Court has jurisdiction over this appeal pursuant to West Virginia Code § 51- 11-4 (2024). After considering the parties’ arguments, the record on appeal, and the applicable law, this Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the OTA’s decision is appropriate under Rule 21 of the Rules of Appellate Procedure. This case arose after the Property Tax Division of the Tax Commissioner’s Office issued a tentative notice of increase in appraisal to Ms. Whetzel on January 17, 2023, notifying her that the tentative mineral appraisal for her oil and gas interests in Marshall County had increased by at least ten percent and one thousand dollars, as required by West Virginia Code § 11-6k-4(e)(1) (2014). The notice stated that the appraisal of her mineral interests increased from $1,549,230 in 2022 to $2,171,220 in 2023. Upon receipt of the notice, Ms. Whetzel filed a petition for a Property Tax Appeal with OTA on March 3, 2023. The parties agreed to waive the evidentiary hearing and submitted the appeal on their written briefs; the submission of evidence closed on March 5, 2024. The parties jointly stipulated the following facts: 1 Petitioner is represented by J. Anthony Edmond, Jr., Esq. Respondent is represented by Sean M. Whelan, Esq., Cassandra L. Means-Moore, Esq., and John B. McCuskey, Esq. 1  1. The property at issue consists of oil and gas interests owned by Ms. Whetzel, located on 151.79 acres in Marshall County. 2. For property tax year 2023, real property tax of $35,950.92 was assessed against the oil and gas interests by the Marshall County Assessor, payable in half-year increments of $17,975.46. 3. By petition dated February 28, 2023, Ms. Whetzel appealed the valuation of her oil and gas interests to OTA. The main issue before OTA was whether the Tax Department properly valued Ms. Whetzel’s mineral interest. Ms. Whetzel argued that her mineral interest was improperly assessed because the Tax Department did not follow the guidelines in the pertinent emergency legislative rule sections 3.12 (defining “communitized area”) and 3.34 (defining “natural gas producing property”).2 Ms. Whetzel alleged that her mineral acreage 2 The portion of the emergency legislative rule cited by Ms. Whetzel, titled “Valuation of Producing and Reserve Oil, Natural Gas Liquids, and Natural Gas for Ad Valorem Property Tax Purposes,” Code of State Rules §§ 110-1J-1 – 11, was drafted by the Tax Commissioner, pursuant to West Virginia Code § 11-1C-10(d)(3)(G) (2022), as an emergency legislative rule to be effective for all assessments made on or after July 1, 2022, for the valuation of property producing oil, natural gas liquids, or any combination thereof because the prior rule was set to expire. The definitions cited by Ms. Whetzel are as follows: § 110-1J-3. Definitions. As used in this rule and unless the context clearly requires a different meaning, the following terms have the meaning ascribed in this section. 3.12. “Communitized area” means an area involving more than one lease, due to a cooperative agreement or legal mandate, and is developed for the drilling and operation of a single or multiple oil or gas wells, or both, by one or more operator. 3.34. “Natural gas producing property” means the property from which natural gas or natural gas liquids has been produced or extracted at any time during the calendar year preceding the July 1 assessment date.