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Linebarger Helps School Districts Reclaim State Funds

In 2018, when the Texas Supreme Court ruled in favor of a massive change to how appraisal districts value oil field equipment, many school districts that serve students in oil and gas-rich regions of the state had to give back large sums of tax dollars to those companies. Linebarger is helping some of those districts recoup some of that money through the property value appeal process.

“We can’t go back and appeal previous years, but with the legal decision changing the value of the property in some school districts, we are able to file a PVS Audit on prior years with the state and get back that money for our districts,” said Robby Harbuck, Director of Linebarger’s Property Value Studies Department.

In its decision, the Texas Supreme Court ruled that the plaintiff, EXLP Leasing LLC, could value its for-lease and for-rent natural gas compressors according to the value of lease revenue the compressors generated during the previous tax year. Property like this traditionally has been valued according to what it would sell for on the open market – which is a significantly higher amount than the value of revenue generated. More importantly for many school districts, the Court ruled that compressors would be taxed in the county where their home yard is located, rather than the county where the compressor is used.

This ruling required some school districts to refund tax dollars they collected from oil and gas companies when the ruling revalued the property, and moved that valuable property outside of their taxing jurisdictions.

The Texas Legislature offered some relief in the form of HB3, which paid the interest owed on refunded taxes. But districts like Kilgore ISD hope to reclaim more of these funds directly from the State through the property value audit service Linebarger offers.

“It may be a couple hundred thousand dollars we could get back from [Linebarger] doing this,” KISD Chief Financial Officer Revard Pfeffer said at the Nov. 16 KISD board meeting.

Linebarger filed an audit with the State to reassess previous tax values from 2012 to 2016 and is finalizing the 2017 audit, Harbuck said.