Entities file petition against SCAD, Kinder Morgan

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Four taxing bodies want Kinder Morgan properties reappraised for 2013-18

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Four Scurry County taxing entities are taking the Scurry County Appraisal District (SCAD) and Kinder Morgan to court.
Attorney Brent Lemon filed a petition in 132nd Judicial District Court Thursday on behalf of Scurry County, Snyder ISD, Scurry County Hospital District and Western Texas College. He is asking the court to order the reappraisal of Kinder Morgan properties in Scurry County for 2018 and the re-appraisal of Kinder Morgan properties for 2013-17.
Kinder Morgan SACROC, LP; Kinder Morgan CO2 Co., LP; Kinder Morgan Production Co., LP; and Kinder Morgan Production Co., LLC, are included in the suit because they are the property owners in question, Lemon wrote in an email.
“We are confident that the company’s oil and gas reserves have been fairly reported, appraised and assessed, and we intend to vigorously defend the litigation,” a Kinder Morgan spokeswoman wrote in an email.
The entities are also asking for SCAD and Kinder Morgan to pay all court costs and any other “relief, whether at law or in equity, to which plaintiffs show themselves justly entitled,” the lawsuit stated.
Lemon represented the school district, hospital and college during a June Appraisal Review Board (ARB) hearing, during which he requested the reappraisal. The board denied his request without comment following three hours of presentations. The county was not included as a party during that hearing, but Lemon previously said the county could be part of a local lawsuit against SCAD. 
Lemon currently has a case filed on behalf of the county, in a Dallas district court, against Thomas Y. Pickett and Company for negligence.
As part of the lawsuit’s discovery, Lemon asked for SCAD and Kinder Morgan to provide all data used to set the mineral values for the years in question. Those figures include gross oil production, net revenue interest, net oil production, starting gross oil price, escalation rate, oil price, gross income, operating expense details, severance taxes, net income, discount factor and discounted cash flow. 
He is also requesting all settlement agreements between Pickett and Scurry County taxing entities since 2015. The school district, college and hospital district reached a settlement agreement with Pickett after a mineral value input error was discovered by the Texas Comptroller’s office in 2016. The error was discovered after the three entities set tax rates for the fiscal year.
The lawsuit is also asking for all communications between Kinder Morgan entities and SCAD employees and directors relative to the protest hearing in June. Lemon is also requesting any Kinder Morgan taxpayer protest orders by the ARB since 2012. 
Chief Appraiser Larry Crooks said last month that 2018 was the first time he could remember Kinder Morgan protesting its mineral values.
Lemon asked the court to order Kinder Morgan to provide all “confidentiality agreements executed since Jan. 1, 2011” between the company, SCAD and Pickett.
SCAD attorney Kirk Swinney said during the ARB hearing in June that some of the information Lemon requested was labeled confidential by Kinder Morgan. A Dallas district judge ordered Kinder Morgan to produce the information in a case involving Pickett and Iraan-Sheffield ISD in Pecos County. 
However, Kinder Morgan appealed that decision and a stay was issued by an appeals court. No action has been taken since the stay was issued earlier this month.
The Dallas court also rescheduled hearings to dismiss two cases against Pickett, one filed by Scurry County and the other by Iraan-Sheffield ISD. Both hearings were scheduled for Thursday, but were pushed back to Oct. 5. Pickett is asking the judge to dismiss the case because the court lacks jurisdiction because it is a tax protest, court documents stated.