Justia Energy, Oil & Gas Law Opinion Summaries

The Surface Mining Control and Reclamation Act, 30 U.S.C. 1201, imposes a fee to underwrite the costs of restoring lands damaged by mining. The fee is 28 cents per ton of coal produced by surface mining and the lesser of 12 cents per ton produced by underground mining, or 10 percent of the value of the coal at the mine. The reclamation fee for lignite coal is the lesser of eight cents per ton or two percent of the value of the coal at the mine. Lignite coal produces less than 8,300 British thermal units per pound, less energy than produced by bituminous, subbituminous, and anthracite coal. In the area of Wyodak’s strip mine near Gillette, Wyoming, coal transitions from subbituminous to lignite in the seams. The end product of the mine’s process is a mixture of subbituminous and lignite coal. Wyodak paid the higher reclamation fee for non-lignite coal. In 2005, Wyodak‘s consultant estimated that 12 percent of its coal was lignite and 88 percent was higher quality. The Office of Surface Mining denied a requested refund. The Claims Court first rejected claims not arising within six years of the filing date, then denied relief, holding that the fee is on coal as extracted. Because the BTU value of the blend was higher than 8300 BTUs per pound, Wyodak was not entitled to a refund for any lignite in the mix. The Federal Circuit reversed and remanded, noting that Wyodak had the burden of proving entitlement to and the amount of any refund. View "Wyodak Res. Dev. Corp. v. United States" on Justia Law

Entergy filed suit against Vermont seeking a declaratory judgment that Vermont's Electrical Energy Generating Tax was unconstitutional. On appeal, Entergy challenged the district court's grant of Vermont's motion to dismiss based on lack of subject matter jurisdiction. At issue was whether the Tax Injunction Act, 28 U.S.C. 1341, denied the federal courts jurisdiction to review Entergy's challenges to the Generating Tax. The Act prohibits federal courts from interfering with state taxation schemes so long as the state courts offer an adequate forum to litigate the validity of the tax. The court concluded that the Act applied to the Generating Tax and that Vermont provided a plain, speedy, and efficient mechanism for raising Entergy's objections to the validity of the tax. Accordingly, the court affirmed the judgment of the district court. View "Entergy Nuclear v. Shumlin" on Justia Law

The 1987 Public Utilities Act, 220 ILCS 5/8-403.1, was intended to encourage development of power plants that convert solid waste to electricity. Local electric utilities were required to enter into 10-year agreements to purchase power from such plants designated as “qualified” by the Illinois Commerce Commission, at a rate exceeding that established by federal law. The state compensated electric utilities with a tax credit. A qualified facility was obliged to reimburse the state for tax credits its customers had claimed after it had repaid all of its capital costs for development and implementation. Many qualified facilities failed before they repaid their capital costs, so that Illinois never got its tax credit money back. The Act was amended in 2006, to establish a moratorium on new Qualified Facilities, provide additional grounds for disqualifying facilities from the subsidy, and expand the conditions that trigger a facility’s liability to repay electric utilities’ tax credits. The district court held that the amendment cannot be applied retroactively. The Seventh Circuit affirmed. The amendment does not clearly indicate that the new repayment conditions apply to monies received prior to the amendment and must be construed prospectively. View "Illinois v. Chiplease, Inc." on Justia Law

In 2003, after more than a decade of litigation, the IRS assessed penalties under now-repealed I.R.C. 6621(c), which penalizes “substantial” underpayments of tax “attributable to tax motivated transactions” against the 19 partners of the Dillon Oil Technology Partnership in tax years 1983 and 1984. The partners paid the tax and penalties in 2004, and, in 2006, initiated a refund suit. The Court of Federal Claims dismissed for lack of subject matter jurisdiction under the Tax Equity and Fiscal Responsibility Act, 1 I.R.C.7422(h), which provides that individual partners may not bring tax challenges relating to subject matter “attributable to a partnership item.” Such claims must be brought in a partnership-level suit by the partnership representative or Tax Matters Partner. The Federal Circuit affirmed, calling the claim an impermissible collateral attack. View "Bush v. United States" on Justia Law

A school district (District) obtained an in rem delinquent property tax judgment against an oil and gas lease that Respondent owned and operated. Respondent did not appeal, and the District foreclosed its judgment lien on the leasehold, taking ownership. The Railroad Commission ordered Respondent to plug a well on the lease. Respondent did not comply, and the Commission plugged the well and brought an enforcement action in court to recover the costs of the operation and the penalty. Respondent and the Commission settled. Respondent then sued the District, alleging in part that the District's actions had resulted in a taking of his property requiring compensation. The trial court dismissed Respondent's action for want of jurisdiction, but the court of appeals reversed and remanded with respect to the takings claim. The Supreme Court reversed and dismissed the case, holding that the trial court correctly dismissed Respondent's case, as Respondent did not assert on appeal that the District took his property without compensation. View "W. Hardin County Consol. Indep. Sch. Dist. v. Poole" on Justia Law

The Automotive United Trades Organization (AUTO) and Tower Energy Group (Tower) brought an as-applied state constitutional challenge to a tax based on the possession of petroleum as a hazardous substance. AUTO and Tower claimed that the hazardous substances tax (HST) violated article II, section 40 of the state constitution because the revenue from motor vehicle fuel was not being "placed in a special fund to be used exclusively for highway purposes." The trial court held on summary judgment that AUTO's claim was barred because it was not filed within a reasonable time under the Uniform Declaratory Judgments Act (UDJA) and that the HST does not violate article II, section 40. Upon review, the Supreme Court reversed in part and affirmed in part. The Court reversed the trial court in barring AUTO and Tower from bringing their constitutional challenge because to do so would deprive the Supreme Court of its vested power to determine the constitutionality of specific legislation. The Court affirmed the trial court, however, in granting summary judgment to the State because article II, section 40 provides that "this section shall not be construed to include revenue from general or special taxes or excises not levied primarily for highway purposes." View "Auto. United Trades Org. v. Washington" on Justia Law

Respondent City of Concord appealed a superior court order that denied it summary judgment in favor of Petitioner EnergyNorth National Gas (d/b/a National Grid NH, or "National Grid"). The City argued that the trial court erroneously determined that RSA 231:185 (2009) and RSA 236:11 (2009) preempted the City's ordinance authorizing it to charge certain roadway fees. The issue between the parties arose from National Grid's desire to excavate certain streets to install, maintain or replace its underground pipes that delivered natural gas. The fees covered damage for damages arising from the excavation. Upon review, the Supreme Court concluded that granting summary judgment in favor of National Grid was in error. The City argued that its roadway fees are consistent with the pertinent statutes because they "cover[ ] maintenance costs to repair the roadway after it has been initially patched, which [are] used to restore the excavated roadway to the condition that existed prior to the excavation." The Court was not persuaded that when the legislature enacted the statutes at issue, it made any assumption or finding, implied or otherwise, as to whether repaving a paved excavated roadway restored the roadway's original life expectancy. The Court was thus left with a factual dispute whether patching an excavated roadway with new pavement diminished or restored its original life expectancy. Because of that "genuine issue of material fact," the Court remanded the case for further proceedings. View "EnergyNorth Natural Gas, Inc. v. City of Concord" on Justia Law

Petitioner Town of Seabrook appealed an order of the New Hampshire Department of Environmental Services (DES) which granted Respondent NextEra Energy Seabrook, LLC (NextEra), several tax exemptions under RSA 72:12-a (Supp. 2011). Upon review of the record, the Supreme Court found that the record supported DES' decisions except for one: the Court found no evidence in the record to support an increase in a percentage allocation allowed under the statute. Accordingly, the Court partly affirmed, partly reversed the DES' decision, and remanded the case for further proceedings. View "Appeal of Town of Seabrook " on Justia Law

"This matter has a complicated and convoluted procedural history, which has ultimately resulted in a 'cobweb of litigation.'" This case has its genesis in 1994 when ANR Pipeline Company (ANR) first challenged the ad valorem taxes assessed against its public service pipelines by filing a protest with the Louisiana Tax Commission (LTC). Thereafter, through 2003, ANR filed annual protests with the LTC. Tennessee Gas Pipeline Company (TGP) and Southern Natural Gas Company (SNG) also filed protests with the LTC regarding the ad valorem taxes assessed against their public service pipelines from 2000 to 2003.The issues before the Supreme Court concerned whether the reassessment of public service properties issued on remand of this matter in accordance with a court order constituted a local assessment by the local assessors or a central assessment by the Louisiana Tax Commission (LTC) and whether, in this taxpayers’ action, the assessors have a right to challenge a decision of the LTC relative to those reassessment valuations. Upon review, the Supreme Court concluded that the reassessments were central assessments governed by the provisions of La. Const. art. VII, sec. 18 and La. R.S. 47:1851, et seq. Furthermore, the Court found that once joined by the taxpayers as defendants in the taxpayers’ Section 1856 action for judicial review, the assessors are entitled to challenge the LTC’s final determination of the reassessment valuations. Accordingly, the Court found the lower courts erred in sustaining the taxpayers’ exceptions of no right of action and dismissing the assessors’ cross-appeals. View "ANR Pipeline Co v. Louisiana Tax Comm'n" on Justia Law

The Pascagoula School District (which contains a Chevron crude oil refinery and a Gulf liquified natural gas terminal) brought suit, seeking a declaration that a new law that mandated that revenue the District collected from ad valorem taxes levied on liquified natural gas terminals and crude oil refineries be distributed to all school districts in the county where the terminals and refineries were located was unconstitutional and requesting injunctive relief. All parties filed for summary judgment. After a hearing, the trial judge ruled that the law was constitutional, and the plaintiffs appealed that decision. Because the Supreme Court found the contested statute violated the constitutional mandate that a school district's taxes be used to maintain "its schools," it reversed and remanded the case for further proceedings. View "Pascagoula School District v. Tucker" on Justia Law