247 P.3d 1170
Okla.2011Background
- Oklahoma Assessor challenged constitutionality of 68 O.S.Supp.2010 § 2817(L), which directs annual valuation of oil/gas exploration personal property using the Hadco International bulletin for the tax year.
- § 2817(L) makes the Hadco bulletin the sole and conclusive means to determine fair cash value, excluding relevant market data and arm's-length sales.
- Trial court granted declaratory judgment that § 2817(L) is unconstitutional under Article X, § 8(A)(1) of the Oklahoma Constitution.
- Unit Drilling Company defended the statute, arguing classification of property and Hadco as a uniform industry method are constitutional.
- The Supreme Court retained the case for statewide public concern and agreed with the trial court that the statute is unconstitutional because it divorces value from fair market value.
- Court held that Hadco can support valuation but cannot be the exclusive determinant, and must be supplemented by market data.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 2817(L) violate the fair cash value requirement? | Morris argues the statute ties value solely to Hadco, ignoring market data. | Unit Drilling contends classification with Hadco is permissible and uniform. | Unconstitutional; violates fair cash value requirement. |
| May Hadco be used as the sole method for valuation? | Hadco alone dictates value, contravening fair market value. | Hadco provides uniform standard for industry valuation. | No; cannot be sole/conclusive factor and must incorporate market data. |
Key Cases Cited
- Liddell v. Heavner, 180 P.3d 1191 (Okla. 2008) (specialized valuation cannot be divorced from fair market value)
- Bliss Hotel Co. v. Thompson, 378 P.2d 319 (Okla. 1962) (fair market value governs assessments, based on bona fide arm's-length sales)
- Cimmarron Transportation, LLC v. Heavner, 186 P.3d 947 (Okla. 2008) (evidence of arm's-length sales should not be disregarded when valuing property)