Opinion ID: 2428184
Heading Depth: 1
Heading Rank: 4

Heading: taxing limestone as a mine or quarry

Text: Taxing a mine or quarry entails appraising only those minerals actually under production. The majority admits that Wise County can use the authority provided under this section to appraise the limestone in any of Gifford-Hill's open quarries or mines. But the land's true value stems from its potential as a long-term source of limestone, not simply its present production levels. Nevertheless, the majority rests its solution on a modified mine or quarry classification. The majority's solution, while straining for compromise, has created a complicated method for arriving at a just ad valorem tax. The majority says that limestone is not a mineral for tax purposes. As noted above, this conclusion stems from the court's analogizing Texas' oil and gas law to Texas' tax law. This analogy fails because the parties' status and the governing policies fundamentally differ. The majority's solution concludes that only limestone in a quarry should be taxed, while all other limestone, even though it adds value to Gifford-Hill's interest, should remain untaxed. This contravenes the policies underlying ad valorem taxation. For the principal goal of an ad valorem tax is to tax property at a level that reflects the property's true value. The court further suggests that several other factors should figure into appraising limestone in a quarry, including incomplete reclamation activities on prior production areas, mining or quarrying plans filed with state authorities, and reports from company officials and engineers. At 816. The court leaves the parties and the bench and bar completely in the dark, because there are no requirements that mining companies reclaim or restore limestone quarrys nor that they file quarrying plans with any state authority. [5] The majority's compromise solution is neither equitable nor easy. It asserts that Wise County can tax any limestone in open quarries. But then it says that limestone in a quarry may extend beyond the area from which limestone is presently being produced. At 816. This will make the tax appraisal process quite difficult. To accurately appraise land on which an open quarry exists, counties will have to hire geologists to help them ascertain how far a limestone (or other mineral) vein extends beyond the open quarry. This prospect renders the majority's solution too burdensome. Ironically, the court's modified quarry standard could produce the same result as if we taxed limestone as a mineral in place, because a geologist conceivably could conclude that limestone in a quarry extendfs] beyond the area from which limestone is presently being produced to all of Gifford-Hill's 2,500 acres.