IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
FILED
January 2022 Term June 8, 2022
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
No. 21-0235
JEFFERSON COUNTY FOUNDATION, INC.,
Plaintiff Below, Petitioner,
v.
WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY,
and
ROXUL USA, INC. d/b/a ROCKWOOL
Defendants Below, Respondents.
Appeal from the Circuit Court of Kanawha County
Business Court Division
The Honorable Christopher C. Wilkes, Judge
Case No. 20-C-332
AFFIRMED
Submitted: March 15, 2022
Filed: June 8, 2022
Robert M. Bastress, Jr., Esq. Peter G. Markham, Esq.
Morgantown, West Virginia Michael E. Caryl, Esq.
Christopher P. Stroech, Esq. Camden P. Siegrist, Esq.
Arnold & Bailey, PLLC BOWLES RICE LLP
Charles Town, West Virginia Charleston, West Virginia
Counsel for Respondent, West Virginia
Robert M. Bastress, III, Esq. Economic Development Authority
Dipiero Simmons McGinley
& Bastress, PLLC Joseph V. Schaeffer, Esq.
Charleston, West Virginia Babst, Calland, Clements and Zomnir, P.C.
Counsel for Petitioner Pittsburgh, Pennsylvania
James A. Walls, Esq.
SPILMAN THOMAS & BATTLE, PLLC
Morgantown, West Virginia
James E. Simon, Esq.
SPILMAN THOMAS & BATTLE, PLLC
Charleston, West Virginia
Counsel for Respondent, Roxul USA, Inc.
d/b/a ROCKWOOL
JUSTICE WALKER delivered the Opinion of the Court.
JUSTICE BUNN not participating.
SYLLABUS BY THE COURT
1. “Appellate review of a circuit court’s order granting a motion to
dismiss a complaint is de novo.” Syllabus Point 2, State ex rel. McGraw v. Scott Runyan
Pontiac-Buick, Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995).
2. “Where the issue on an appeal from the circuit court is clearly a
question of law or involving an interpretation of a statute, we apply a de novo standard of
review.” Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415
(1995).
3. “An organization has representative standing to sue on behalf of its
members when the organization proves that: (1) at least one of its members would have
standing to sue in their own right; (2) the interests it seeks to protect are germane to the
organization’s purpose; and (3) neither the claim asserted nor the relief requested requires
the participation of individual members in the lawsuit.” Syllabus Point 4, Affiliated
Construction Trades Foundation v. West Virginia Department of Transportation, 227 W.
Va. 653, 713 S.E.2d 809 (2011).
4. “For standing under the Declaratory Judgments Act, it is not essential
that a party have a personal legal right or interest.” Syllabus Point 2, Shobe v. Latimer,
162 W. Va. 779, 253 S.E.2d 54 (1979).
i
5. “When significant interests are directly injured or adversely affected
by governmental action, a person so injured has standing under the Uniform Declaratory
Judgments Act, W.Va.Code s 55-13-1 et seq. (1941) to obtain a declaration of rights, status,
or other legal relations.” Syllabus Point 1, Shobe v. Latimer, 162 W. Va. 779, 253 S.E.2d
54 (1979).
6. “The primary rule of statutory construction is to ascertain and give
effect to the intention of the Legislature.” Syllabus Point 8, Vest v. Cobb, 138 W.Va. 660,
76 S.E.2d 885 (1953).
7. “When a statute is clear and unambiguous and the legislative intent is
plain, the statute should not be interpreted by the courts, and in such case it is the duty of
the courts not to construe but to apply the statute.” Syllabus Point 5, State v. General
Daniel Morgan Post No. 548, V.F.W., 144 W.Va. 137, 107 S.E.2d 353 (1959).
8. “The assessor of a county may assess the value of a leasehold as
personal property separately in an amount such that when the value of the freehold subject
to the lease is combined with the value of the leasehold the total reflects the true and actual
value of the real property involved.” Syllabus Point 1, Great A & P Tea Co. v. Davis, 167
W. Va. 53, 278 S.E.2d 352 (1981).
9. “The county assessor may presume that leaseholds have no value
independent of the freehold estate and proceed to tax all real property to the freeholder at
ii
its true and actual value; the burden of showing that a leasehold has an independent value
is upon the freehold taxpayer and the taxpayer must request in a timely manner the separate
listing of freehold and leasehold interests.” Syllabus Point 2, Great A & P Tea Co. v.
Davis, 167 W. Va. 53, 278 S.E.2d 352 (1981).
iii
WALKER, Justice:
In 2019, Respondent West Virginia Economic Development Authority
adopted a resolution to undertake a series of transactions with Respondent Roxul USA,
Inc. d/b/a ROCKWOOL to finance the construction of a manufacturing plant in Jefferson
County, West Virginia. Petitioner Jefferson County Foundation, Inc. views the
transactions as a “de facto tax abatement” for Rockwool that violates both statute and the
West Virginia Constitution, and it has filed suit for a declaration saying so. The Business
Court Division of the Circuit Court of Kanawha County has dismissed the Foundation’s
suit with prejudice, and the Foundation now appeals.
WVEDA is statutorily authorized to engage in the transactions challenged
here; those transactions are not an exemption from tax; the West Virginia Economic
Development Act does not conflict with West Virginia Code § 11-3-9 (2015) (identifying
types of property exempt from taxation); and the transactions do not violate Article X, § 1
of the West Virginia Constitution (demanding equal and uniform taxation). For those
reasons, the orders dismissing the Foundation’s complaint with prejudice are affirmed.
I. FACTUAL AND PROCEDURAL HISTORY
The West Virginia Legislature enacted the West Virginia Economic
Development Authority Act (the Act) in 1989. 1 The Act created WVEDA, a state
1
W. Va. Code §§ 31-15-1 to -33.
1
instrumentality intended to serve many purposes, including developing and advancing
“business prosperity and economic welfare” of the State of West Virginia and “to borrow
moneys and to issue its bonds . . . ; [and] to furnish money and credit or credit enhancement
. . . for the promotion of new projects . . . .” 2 The Legislature declared those to be “public
purposes for which public money may be spent and are purposes which will promote the
health, safety, morals, right to gainful employment, business opportunities and general
welfare of the inhabitants of the state.” 3
The Legislature imbued WVEDA with “all powers necessary or appropriate
to carry out the purposes” of the Act. 4 Relevant to this matter, in West Virginia Code §
31-15-6 (2022), the Legislature empowered WVEDA:
(2) To determine, upon the proper application of an
industrial development agency or an enterprise, whether the
declared public purposes of this article have been or will be
accomplished by the establishment by such agency or
enterprise of a project in this state.
….
(9) To issue revenue bonds or notes to fulfill the
purposes of this article, and to secure the payment of such
bonds or notes, all as hereinafter provided.
2
Id. § 31-15-3 (2004).
3
Id.
4
Id. at § 31-15-6 (2022). The Legislature enacted stylistic amendments to § 31-15-
6 in 2022. It also added subsection (42), relating to the Jobs Investment Trust. S.B. 523,
85th Leg., Reg. Sess. (W. Va. 2022).
2
(10) To issue and deliver revenue bonds or notes in
exchange for a project.
....
(17) To make contracts and to execute all instruments
necessary to carry out the powers and duties of [WVEDA] . . .
.
....
(21) To acquire, construct, maintain, improve, repair,
replace, and operate projects within this state.
....
(24) To acquire, by purchase, lease, donation, or
eminent domain, any real or personal property, or any right or
interest therein, as may be necessary or convenient to carry out
the purposes of [WVEDA].
....
(31) To sell, license, lease, mortgage, assign, pledge, or
donate its property, both real and personal, or any right or
interest therein to another or authorize the possession,
occupancy or use of such property or any right or interest
therein by another, in such manner and upon such terms as it
deems appropriate.
....
(37) To exercise such other and additional powers as
may be necessary or appropriate for the exercise of the powers
herein conferred.
3
And, in West Virginia Code § 31-15-17 (1989), the Legislature provided for
the exemption of property used or acquired by WVEDA from taxation. To that end,
§ 31-15-17 states:
The exercise of the powers granted to [WVEDA] by this
article will be in all respects for the benefit of the people of the
state for the improvement of their health, safety, convenience
and welfare and is a public purpose. As the operation and
maintenance of projects financed under this article will
constitute the performance of essential governmental
functions, [WVEDA] shall not be required to pay any taxes or
assessments upon any property acquired or used by [WVEDA]
or upon the income therefrom. All bonds and notes of
[WVEDA], and all interest and income thereon, shall be
exempt from all taxation by this state and any county,
municipality, political subdivision or agency thereof, except
inheritance taxes.
In May 2019, WVEDA invoked its powers under the Act, generally, and
§ 31-15-6, particularly, and adopted the “RESOLUTION AUTHORIZING THE
ISSUANCE OF BONDS BY THE WEST VIRGINIA ECONOMIC DEVELOPMENT
AUTHORITY TO BE EXCHANGED FOR CERTAIN COMMERCIAL FACILITIES
AND EQUIPMENT OWNED BY ROXUL USA INC. / D/B/A ROCKWOOL.” The
Resolution described the issuance of revenue bonds by WVEDA and a series of
transactions to be executed with Rockwool, a private, for-profit enterprise that
manufactures stone wool insulation for retail, commercial, and industrial markets and
which has built a manufacturing facility in Jefferson County, West Virginia.
4
In the Resolution, WVEDA committed to issuing a series of revenue bonds
not to exceed $150,000,000, and then exchanging those bonds with Rockwool for
ownership of the plant site, facility, and equipment (Project Property). According to the
Resolution, WVEDA will then lease the Project Property to Rockwool. Rockwool’s lease
payments will (1) equal the debt service payments on the bonds, (2) secure the bonds, (3)
continue no longer than the term of the bonds, and (4) provide the sole revenue available
to WVEDA to service the payments on the bonds. Finally, the Resolution provides that at
the end of the lease term, Rockwool will have the option to purchase the Project Property
from WVEDA for $1. We adopt the parties’ nomenclature and describe the whole of the
transactions envisaged in the Resolution as the “sale-leaseback.”
In April 2020, the Foundation—a West Virginia non-profit corporation
formed with the aim of preserving and protecting the quality of life for all Jefferson County
residents—filed a complaint in the Circuit Court of Kanawha County seeking a declaration
that (1) WVEDA and Rockwool’s conduct violated Article X, Sections 1 and 6 of the West
Virginia Constitution, (2) the actions of WVEDA are null, void, and unauthorized by law,
and (3) § 31-15-17 is facially vague, overly broad, irrational and unreasonable, and so
violates the Foundation’s rights under Articles III, § 10 and X, §1 of the West Virginia
Constitution. 5
5
The Foundation alleges that it has a three-member board of directors. According
to the Foundation’s complaint, those directors own real and/or personal property in
5
Rockwool moved to dismiss the Foundation’s complaint under Rules
12(b)(1) and 12(b)(6) of the West Virginia Rules of Civil Procedure in May 2020.
WVEDA moved to dismiss the Foundation’s complaint in June 2020. That same month,
Rockwool and WVEDA jointly moved to refer the case to the Business Court Division
under Rule 29.06 of the West Virginia Trial Court Rules. The Foundation responded in
opposition to the motion for referral. 6 On December 4, 2020, then-Chief Justice Tim
Armstead granted the motion to refer and ordered the matter transmitted to the Business
Court Division.
On February 24, 2021, the Business Court entered nearly identical orders
granting Rockwool and WVEDA’s motions and dismissing the Foundation’s complaint
with prejudice. The Business Court held that the Legislature had explicitly empowered
WVEDA to enter the transactions detailed in the Resolution and which comprise the sale-
leaseback. The Business Court also held that neither the sale-leaseback nor § 31-15-17
conflicted with § 11-3-9 (2015), in which the Legislature listed certain types of property
that are exempt from taxation. Finally, the Business Court determined that the thrust of
the Foundation’s complaint is this: that “the sale-leaseback [i.e., the Resolution] is
Jefferson County and pay related taxes. The Foundation claims that the directors will be
“damaged by Rockwool’s unfair tax treatment . . . .” The Foundation alleges that it and
other Jefferson County citizens will be substantially injured and damaged by, in the
Foundation’s words, WVEDA’s “creation of a form of unequal taxation.”
6
The Hon. Tod J. Kauffman, Judge, wrote to Justice Tim Armstead, then Chief
Justice of this Court, opposing the motion of Rockwool and WVEDA to refer this case to
the Business Court Division.
6
something the law blesses when it should not.” The Legislature, and not the courts, has
the authority to remedy that complaint, the court reasoned, so the matter was a non-
justiciable political question.
The Business Court went on to analyze what it recognized as a separate
question raised in the Foundation’s complaint: whether the sale-leaseback violates the
guarantee of equal and uniform taxation contained in Article X, § 1 of the West Virginia
Constitution. The court rejected the Foundation’s theory that it does, concluding that once
the transactions comprising the sale-leaseback are complete, Rockwool will possess a
leasehold interest in the Project Property and WVEDA will possess a fee interest. At that
point, the court reasoned, Rockwool’s leasehold interest will be valued separately from
WVEDA’s fee interest in the Project Property. 7 The court concluded that Rockwool’s
separate, leasehold will be valued pursuant to the presumption—applicable to all
leaseholds—that “it has no value independent of the freehold estate” 8 while WVEDA’s fee
interest will be assessed (presumptively) the full value of the estate. That § 31-15-17
exempts the fee interest held by WVEDA from taxation was of no moment, the Business
Court reasoned, because Rockwool’s leasehold interest will be a separate estate to be
7
See, e.g., Syl. Pt. 3, Univ. Park at Evansdale, LLC v. Musick, 238 W. Va. 106, 792
S.E.2d 605 (2016) (Musick I) (“‘The assessor of a county may assess the value of a
leasehold as personal property separately in an amount such that when the value of the
freehold subject to the lease is combined with the value of the leasehold the total reflects
the true and actual value of the real property involved.’ Syl. Pt. 1, Great A & P Co. v.
Davis, 167 W.Va. 53, 278 S.E.2d 352 (1981).”).
8
Syl. Pt. 2, in part, Great A & P Tea Co., 167 W. Va. at 53, 278 S.E.2d at 352.
7
valued separately. The court then found that Rockwool “should not have to pay the same
taxes on a leasehold as it does on a freehold,” and that “the presumption that leaseholds
lack independent value does not give rise to an equal and uniform taxation clause
violation.”
The Foundation now appeals the orders granting Rockwool and WVEDA’s
motions and dismissing its complaint with prejudice.
II. STANDARD OF REVIEW
“Appellate review of a circuit court’s order granting a motion to dismiss a
complaint is de novo.” 9 Likewise, “[w]here the issue on an appeal from the circuit court is
clearly a question of law or involving an interpretation of a statute, we apply a de novo
standard of review.” 10
III. ANALYSIS
The Foundation assigns three, substantive errors to the Business Court’s
order dismissing its complaint for declaratory relief. First, the Foundation contends that
the lower court erroneously concluded that WVEDA possesses the statutory authority to
enter the sale-leaseback. Second, the Foundation argues that the de facto exemption from
9
Syl. Pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va.
770, 461 S.E.2d 516 (1995).
10
Syl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415 (1995).
8
tax allegedly granted to Rockwool via the sale-leaseback conflicts with § 11-3-9. Third,
the Foundation asserts that the sale-leaseback detailed in the Resolution violates Article X,
§ 1 of the West Virginia Constitution. 11 But before we consider those arguments, we must
take up two jurisdictional matters: the Foundation’s standing to pursue declaratory relief
and whether it seeks an answer to a non-justiciable political question.
A. Standing
WVEDA argued before the Business Court that the Foundation lacked
standing to pursue its claim for declaratory relief. The Business Court did not analyze that
argument in its order granting WVEDA’s motion to dismiss the Foundation’s complaint.
Nevertheless, “‘[s]tanding is a jurisdictional requirement,’” 12 and “this Court has the
inherent power and duty to determine unilaterally its authority to hear a particular case.” 13
11
The Foundation also assigns error to the transfer of this case to Business Court
but has not directed the Court’s attention to authority supportive of its position that the
December 4, 2020, order of transfer is, in fact, an appealable order. In addition, the
Foundation did not raise this issue to the Business Court in response to the motions to
dismiss or otherwise. For those reasons, the Foundation is not entitled to relief on this
assignment of error.
12
Men & Women Against Discrimination v. Fam. Prot. Servs. Bd., 229 W. Va. 55,
60, 725 S.E.2d 756, 761 (2011) (quoting Franklin D. Cleckley, Robin J. Davis & Louis J.
Palmer, Jr., Litigation Handbook on West Virginia Rules of Civil Procedure § 12(b), at 21
(Supp.2004)).
13
Syl. Pt. 2, in part, James M.B. v. Carolyn M., 193 W. Va. 289, 456 S.E.2d 16
(1995).
9
As we have explained, “‘[g]enerally, standing is defined as ‘[a] party’s right
to make a legal claim or seek judicial enforcement of a duty or right.’” 14 Standing “is
gauged by the specific common-law, statutory or constitutional claims that a party
presents.” 15 When an organization such as the Foundation pursues a claim on behalf of its
members, we consider whether that organization has representative standing. On that
point, we have held that
[a]n organization has representative standing to sue on
behalf of its members when the organization proves that: (1) at
least one of its members would have standing to sue in their
own right; (2) the interests it seeks to protect are germane to
the organization’s purpose; and (3) neither the claim asserted
nor the relief requested requires the participation of individual
members in the lawsuit.[16]
Applying that standard here, the allegations in the Foundation’s complaint
satisfy prongs (2) and (3). The Foundation alleges that it “educates and advocates for
effective and accountable government, sustainable development, and the protection of
health, heritage, and the environment,” and that its “current priority focus [is] ensuring the
accountability of all governmental entities that are involved in and responsible for the
Findley v. State Farm Mut. Auto. Ins. Co., 213 W. Va. 80, 94, 576 S.E.2d 807,
14
821 (2002) (quoting BLACK’S LAW DICTIONARY 1413 (7th ed. 1999)).
15
Id. at 213 W. Va. at 94–95, 576 S.E.2d at 821–22 (quoting Int’l Primate
Protection League v. Admin. of Tulane Ed. Fund, 500 U.S. 72, 77 (1991)).
16
Syl. Pt. 4, Aff. Const. Trades Found. v. W. Va. Dep’t of Transp., 227 W. Va. 653,
713 S.E.2d 809 (2011).
10
location, construction, permitting, and operation of the proposed [Rockwool] industrial
facility in Jefferson County.” Those interests dovetail with the declaratory relief the
Foundation seeks. Regarding the third prong, the allegations in the Foundation’s complaint
for declaratory relief do not support the conclusion that the participation of the
Foundation’s individual members is necessary. In this case, a court’s comparison of the
component parts of the Resolution to the applicable statutes and constitutional provisions
is neither furthered nor hindered by the non-participation of the Foundation’s individual
members.
Regarding prong (1) (whether at least one member of the Foundation has
standing to sue in his own right), WVEDA contends that no Foundation member—and so,
the Foundation—can satisfy that requirement because all seek redress of a generalized
grievance, and not the “concrete and particularized injury” 17 that is the hallmark of the
standing inquiry. 18 Two syllabus points enunciated in Shobe v. Latimer 19 weigh against
that argument in this case.
17
Syl Pt. 5, in part, Findley, 213 W. Va. at 80, 576 S.E.2d at 821.
18
WVEDA relies upon DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006)
(holding that state taxpayers “have no standing under Article III to challenge state tax or
spending decisions simply by virtue of their status as taxpayers”). WVEDA has not
identified any decisions from this State applying Cuno.
19
162 W. Va. 779, 253 S.E.2d 54 (1979).
11
In Shobe, this Court held that “[f]or standing under the Declaratory
Judgments Act, it is not essential that a party have a personal legal right or interest.” 20
Instead, “[w]hen significant interests are directly injured or adversely affected by
governmental action, a person so injured has standing under the Uniform Declaratory
Judgments Act, W.Va.Code [§] 55-13-1 et seq. (1941) to obtain a declaration of rights,
status, or other legal relations.” 21 In Shobe, plaintiffs alleged that a water contract between
the West Virginia Division of Natural Resources and a public service district violated
certain statutes and procedural and substantive due process protections. 22 The plaintiffs
were not parties to the contract, but the Shobe Court concluded that the plaintiffs had
alleged a direct and substantial interest jeopardized by the contract between DNR and the
public service district, so their third party status did not bar the action. 23 Relying in large
20
Syl. Pt. 2, id.; see also W. Va. Code § 55-13-2 (1941) (“Any person interested
under a deed, will, written contract, or other writings constituting a contract, or whose
rights, status or other legal relations are affected by a statute, municipal ordinance, contract
or franchise, may have determined any question of construction or validity arising under
the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights,
status or other legal relations thereunder.”).
21
Syl. Pt. 1, id.
22
Id. at 781−84, 253 S.E.2d at 56−58. Plaintiff Shobe alleged that the contract
threatened his property and interest as a fisherman of the potentially affected stream.
Plaintiff Nester alleged that the contract directly and substantially injured his interest in
being able to enjoy the stream, unaltered, and threatened to render the stream unusable for
trout fishing. Id. at 784, 253 S.E.2d at 58.
23
Id. at 787, 253 S.E.2d at 60.
12
part on the remedial purpose of the Uniform Declaratory Judgments Act 24 and emphasizing
the plaintiffs’ allegations that the water contract to be entered into by the DNR was illegal
and unconstitutional, the Shobe Court held that the plaintiffs’ complaint contained
sufficient allegations to establish standing to litigate their claims by way of the Uniform
Declaratory Judgments Act.
In view of Syllabus Points 1 and 2 of Shobe, the Foundation’s complaint for
declaratory relief contains allegations sufficient to establish standing at this stage of the
proceedings. Like the plaintiffs in Shobe, the Foundation challenges contracts to be entered
into by a public entity. Like the plaintiffs in Shobe, the Foundation alleges that those
contracts violate both statute and the West Virginia Constitution. And, parallel to the
circumstances in Shobe, the Foundation seeks a declaration regarding the impact of that
public contract on members’ interests that arguably fall within those protected by Article
X, § 1 of the West Virginia Constitution. 25 Considering Shobe, the remedial purpose of
24
See W. Va. Code § 55-13-12 (1941) (“This article is declared to be remedial; its
purpose is to settle and to afford relief from uncertainty and insecurity with respect to
rights, status and other legal relations; and is to be liberally construed and administered.”);
see also City of Martinsburg v. Berkeley Cty. Council, 241 W. Va. 385, 389, 825 S.E.2d
332, 336 (2019) (recognizing that “declaratory judgments provide certainty for parties as
to the extent of their legal rights before undertaking enormous expense or legal
obligation”).
25
Cf. Tug Valley Recovery Ctr., Inc. v. Mingo Cty. Comm’n, 164 W. Va. 94, 106,
261 S.E.2d 165, 172 (1979) (holding that petitioner had demonstrated direct and substantial
interest in “benefits of full and equal taxation” to gain standing to appeal assessment of
another’s mining estates under W. Va. Code § 11-3-25 (1967) (citing W. Va. Code § 11-
3-25 (1967)). The Legislature has repealed § 11-3-25, effective July 1, 2022. See 2021
W. Va. Acts 261.
13
the Declaratory Judgments Act, and the allegations in the Foundation’s complaint for
declaratory relief, we conclude that the Foundation has standing to proceed. 26
B. Political Question
The Business Court concluded that the Foundation’s complaint presents a
nonjusticiable political question. The court viewed the question posed by the complaint as
whether, as a matter of policy, the sale-leaseback ought to be lawful. Before this Court,
the Foundation argues that its complaint includes straightforward allegations that the sale-
leaseback violates the Act and the West Virginia Constitution, and that those allegations
do not cross the line into nonjusticiable, political question territory. The Foundation argues
further that its claims are easily distinguished from decisions by the Supreme Court of the
United States like Nixon v. United States 27 and Rucho v. Common Cause. 28 The Foundation
also argues that this Court has routinely decided cases applying Article X, § 1, and has no
26
The Resolution describes the sale-leaseback in detail, the Authority has adopted
the Resolution, the affected parties—the Foundation, WVEDA, and Rockwool—are before
the Court, and the questions raised by the Foundation’s complaint are purely legal in nature.
See Cox v. Amick, 195 W. Va. 608, 619, 466 S.E.2d 459, 470 (1995) (Cleckley, J.,
concurring) (four factors are relevant to determining whether a declaratory judgment action
should be heard and decided: (1) “whether the claim involves uncertain and contingent
events that may not occur at all” (2) whether “the claim is bound up in the facts” (3) the
“presence or absence of adversity,” and (4) whether “the granting of relief would serve a
useful purpose”). Certainly, a determination of the legality of the sale-leaseback will
“serve a useful purpose,” City of Martinsburg, 241 W. Va. at 389, 825 S.E.2d at 336, and
“be of practical assistance,” before the Authority incurs $150,000,000 in bond indebtedness
and purchases the Project Property.
27
506 U.S. 224 (1993).
28
139 S. Ct. 2484 (2019).
14
difficulty finding standards to do so. Finally, the Foundation suggests that this Court has
not shrunk from resolving questions that have arguably put a toe over the line mentioned
above.
Rockwool responds that the sale-leaseback violates neither statute nor the
West Virginia Constitution, so that the only question that can be presented by the
Foundation’s complaint for declaratory relief is one of policy, that is, is sale-leaseback
good for West Virginia? WVEDA presents similar arguments in support of the Business
Court’s ruling that the Foundation’s complaint presents a nonjusticiable political question.
We concur with the Foundation: the political question doctrine does not bar
this litigation. This case presents challenges to the legality of the sale-leaseback under the
Act, and “[t]he application of a plain statute . . . is a proper judicial function.” 29
Furthermore, “[i]t is the duty of this Court to enforce legislation unless it runs afoul of the
State or Federal Constitutions,” 30 and the Foundation seeks a declaration as to the
constitutionality of the sale-leaseback under Article X, § 1. While “courts must use
restraint in the exercise of their power to declare legislative acts to be unconstitutional”
they also have “a duty to declare such legislative enactment to be invalid when it is clearly
29
Bennett v. Hix, 139 W. Va. 75, 83, 79 S.E.2d 114, 118 (1953).
30
Syl. Pt. 2, in part, Huffman v. Goals Coal Co., 223 W. Va. 724, 679 S.E.2d 323
(2009).
15
unconstitutional.” 31 In view of those duties and the particular allegations in the
Foundation’s plea for declaratory relief, we are not faced with a nonjusticiable political
question and so proceed to consider the parties’ substantive arguments.
C. The Resolution, the Act, and Article X, § 1 of the West Virginia Constitution
The Foundation views the sale-leaseback as an attempt by Rockwool and
WVEDA to leverage the tax-exempt status of property acquired or used by WVEDA to
shield Rockwool from “hav[ing] to pay the same real and personal property taxes at the
same rates as are assessed and levied against all other Jefferson County citizens and
businesses.” The Foundation’s argument turns on its view that WVEDA “relied upon W.
Va. Code § 31-15-17 for the authority to pass the RESOLUTION and acquire title to
Rockwool’s property, with the result that Rockwool will not have to pay property taxes.”
At bottom, we understand the Foundation’s argument to be this: the combination of
transactions that comprise the sale-leaseback are a de facto and illegal exemption of
Rockwool’s property from ad valorem taxes.
To the contrary, Rockwool and WVEDA view the sale-leaseback as a series
of transactions predicated on the powers granted to WVEDA by the Legislature, generally,
and West Virginia Code § 31-15-6, particularly, that will result in WVEDA holding a fee
interest and Rockwool holding a leasehold interest in the Project Property. Any tax
31
State ex rel. Appalachian Power Co. v. Gainer, 149 W. Va. 740, 746–47, 143
S.E.2d 351, 357 (1965).
16
advantage to Rockwool, they argue, stems from the presumption that a leasehold is
valueless. Practically, Rockwool’s leasehold may be presumed valueless, and the county
assessor may “proceed to tax all real property to the freeholder [i.e., the tax-exempt
Authority] at its true and actual value . . . .” 32 With this backdrop in place, we turn to the
Foundation’s arguments.
1. Authority to Conduct the Sale-Leaseback
The Foundation first argues that the circuit court erroneously determined that
the Act authorizes WVEDA to undertake the transactions described in the Resolution and
that comprise the sale-leaseback. Based on its view of the sale-leaseback as a de facto tax
exemption, the Foundation concludes that the Act must be “narrowly construed.” 33 The
Foundation argues that, under a narrow construction, WVEDA may not undertake the sale-
leaseback unless the Legislature has explicitly empowered WVEDA to do so. The
legislative findings and the Act’s salutary purposes do not cut against that narrow view of
the WVEDA’s powers under the Act, the Foundation argues, because WVEDA “can work
to accomplish its objectives and purposes without providing to [Rockwool], a foreign
private corporation, a tax exemption via the use of the sale-leaseback scheme at issue here.”
32
Syl. Pt. 2, in part, Great A&P Tea Co., 167 W. Va. at 53, 278 S.E.2d at 352.
33
Syl. Pt. 12, in part, In re: Hillcrest Gardens, 146 W. Va. 337, 119 S.E.2d 753
(1961) (“Constitutional and statutory provisions exempting property from taxation are
strictly construed.”).
17
Rockwool and WVEDA respond that the Legislature has granted WVEDA
the authority to take each step necessary to accomplish the sale-leaseback, so that the
Legislature’s express authorization to execute a sale-leaseback, writ large, is unnecessary.
WVEDA also highlights the Legislature’s direction that the Act must be liberally
construed, while Rockwool emphasizes that the sale-leaseback supports the Act’s purpose
of promoting industrial development.
a) The Sale-Leaseback is Not a Tax Exemption
The Foundation is correct that “[c]onstitutional and statutory provisions
exempting property from taxation are strictly construed.” 34 But as that rule makes plain, it
applies to tax exemptions. We concur with Rockwool and WVEDA that the sale-leaseback
is a series of transactions that result in two, distinct interests: a fee interest and a leasehold.
Importantly—in fact, dispositively—the sale-leaseback goes no further. The Resolution
does not declare that the leasehold interest produced by the sale-leaseback shall be exempt
from taxation. And, even more importantly, it does not state that the leasehold interest
generated by the sale-leaseback shall be exempt from taxation by virtue of West Virginia
Code § 31-15-17.
Those circumstances do not fit the mold of the cases the Foundation relies
upon to support its argument that the sale-leaseback is a tax exemption, and so the Act must
34
Id.
18
be strictly construed. For example, in In re: Maier, the Court considered whether the tax
exemption afforded counties and municipalities for property leased under the Industrial
Development Bond Act (IDBA) extended to a private, for-profit lessor of a county-owned
warehouse. 35 This Court held that the IDBA exemption did not extend to the warehouse
operator’s leasehold interest because it was a separate interest from the county-owned fee
interest and the lessee used the leasehold interest primarily to maintain a commercial
enterprise. 36
While the Maier Court found that the lease at issue in that case was not
exempt from ad valorem taxation under the IDBA, the Court also acknowledged its earlier
holding in State ex rel. County Court v. Demus, that the IDBA does not contravene Article
X, § 1 of the West Virginia Constitution. 37 The Maier Court made plain that the two
questions—(1) the constitutionality of the IDBA and its tax exemption for certain city and
county property, and (2) whether that exemption extended to the leasehold interest held by
the private entity—were distinct. 38 In this case, the sale-leaseback does not depend on the
extension of § 31-15-17, so the Court’s resolution of the second question in Maier does not
control the outcome, here.
35
In re Maier, 173 W. Va. 641, 642, 319 S.E.2d 410, 411 (1984).
36
Id. at 648, 319 S.E.2d at 418.
37
148 W.Va. 398, 135 S.E.2d 352 (1964).
38
See Maier, 173 W. Va. at 646, 319 S.E.2d at 415.
19
The Maier Court relied heavily on an earlier decision, Greene Line Terminal
Co. v. Martin. 39 There, the lessor of a wharf owned by the City of Huntington claimed that
its lease should be exempt from taxation under West Virginia Code § 11-3-9, exempting
“property belonging exclusively to any . . . city . . . in this state, and used for public
purposes,” because it operated the wharf for public use. 40 The Greene Line Court did not
accept the lessor’s argument, concluding that
the leasehold at bar was properly assessed separately from the
real estate whereon it is based because the latter, being city
property in public use, is exempt from taxation. The property’s
public use operates to the benefit of the city, thereby relieving
it from county and state taxes, but this exemption does not
carry through for the benefit of the owner of the leasehold
because the public service rendered by the lessee is only
incidental to a business for profit.[41]
In Maier and Greene Line, 42 this Court analyzed whether statutory tax
exemptions for city- and county-owned freeholds extended to leases of that property held
39
122 W.Va. 483, 10 S.E.2d 901 (1940).
40
Id. at 486, 10 S.E.2d at 904.
41
Id. at 488−89, 10 S.E.2d at 905 (emphasis added).
42
The Foundation also cites Hillcrest Memorial Gardens, 146 W. Va. at 337, 119
S.E.2d at 753. There, the Court engaged in a similar analysis, although the question was
whether the exemption of “cemeteries” from tax, see W. Va. Code § 11-3-9 (1931),
extended to the personal property of the cemetery’s private operator. Hillcrest, 146 W. Va.
at 340, 119 S.E.2d at 755. This Court held that the operator could not claim the benefit of
the exemption for the personal property. See Syl. Pt. 4, id. at 337, 119 S.E.2d at 754
(“While a cemetery owned and operated by a private corporation is exempt from taxation
under Code, 1931, 11–3–9, as amended, such exemption from taxation does not extend to
and embrace office furniture and equipment used for corporate purposes; money of the
20
by private entities and used for those entities’ benefit. In those cases, the leaseholders’
claim that their property interest was exempt from taxation rested on the extension of the
statutory tax exemption afforded to the public entities. That is, the lessor in Maier claimed
the benefit of the IDBA exemption and the lessor in Greene Line claimed the benefit of the
exemption from tax granted to city and county property used for public purposes.
That precise issue is not presented by the sale-leaseback. The Resolution
does not declare that the leasehold interest produced by the sale-leaseback shall be exempt
from taxation. And, even more importantly, it does not state that the leasehold interest
generated by the sale-leaseback shall be exempt from taxation via the extension of West
Virginia Code § 31-15-17. 43 For those reasons, the Foundation’s contention that Maier
and Greene Line command a strict construction of the Act is unpersuasive, and we
construct the Act as the Legislature has commanded: “liberally and . . . to promote the
purposes set out in” West Virginia Code § 31-5-3. 44
corporation on hand or on deposit in a bank; or notes and accounts receivable representing
the proceeds of the sale of burial lots in such cemetery.”).
43
The Foundation directs the Court’s attention to Gables Realty Ltd. Partnership v.
Travis Cent. Appraisal Dist., 81 S.W.3d 869, 872 (Tex. App. 2002), to support its
contention that the sale-leaseback scheme violates the uniform and equal tax treatment
demanded by Article X, § 1 of the West Virginia Constitution. Like Greene Line and
Maier, in that case the issue was whether a private, for-profit lessee could successfully
extend the tax exemption afforded to the underlying, publicly owned fee interest to exempt
his leasehold interest. That is not the issue presented by the sale-leaseback.
44
W. Va. Code § 31-15-33 (1989).
21
b) The Act Authorizes the Sale-Leaseback
As stated above, the Legislature found that many injurious economic
conditions necessitated passage of the Act and creation of WVEDA. 45 The Legislature
charged WVEDA with pursuing numerous public purposes to address those conditions,
including, “to develop [and] advance the business prosperity and economic welfare of the
State of West Virginia; [and] encourage and assist in the location of new business and
industry. . . .” 46 The Legislature has granted WVEDA “all powers necessary to carry out
the purposes” of the Act. Specifically, in § 31-15-6, the Legislature has authorized
WVEDA to determine whether a certain project will accomplish the public purposes
declared in the Act; 47 issue revenue bonds and to secure payment of those bonds to fulfill
the purposes of the Act; 48 deliver those bonds in exchange for a project; 49 “make contracts
and to execute all instruments necessary to carry out the powers and duties of WVEDA”; 50
acquire projects; 51 “acquire, by purchase, lease, donation, or eminent domain, any real or
personal property, or any right or interest therein, as may be necessary or convenient to
45
Id. at § 31-15-2 (2004).
46
Id. at § 31-15-3 (2004).
47
Id. at § 31-15-6(2).
48
Id. at § 31-15-6(9).
49
Id. at § 31-15-6(10).
50
Id. at § 31-15-6(17).
51
Id. at § 31-15-6(21).
22
carry out the purposes of WVEDA;” 52 sell or lease its property “in such manner and upon
such terms as it deems appropriate;” 53 and “exercise such other and additional powers as
may be necessary or appropriate for the exercise of the powers herein conferred.” 54
“The primary rule of statutory construction is to ascertain and give effect to
the intention of the Legislature.” 55 When the Legislature’s intent is plain, our role is
limited. As we have said, “[w]hen a statute is clear and unambiguous and the legislative
intent is plain, the statute should not be interpreted by the courts, and in such cases it is the
duty of the courts not to construe but to apply the statute.” 56 The provisions cited above
are clear; thus, the Legislature’s intent is plain and the Court’s work is simply to apply the
statutes. In doing so, it is apparent that the Act authorizes WVEDA to enter the sale-
leaseback. Section 31-15-6(i) authorizes WVEDA to take the initial step specified in the
Resolution: to issue revenue bonds. 57 Subsection (j) authorizes WVEDA to exchange those
bonds with Rockwool for the Project Property, and subsection (x) authorizes WVEDA to
purchase the fee interest in the Project Property from Rockwool. Subsection (ee)
52
Id. at § 31-15-6(24).
53
Id. at § 31-15-6(31).
54
Id. at § 31-15-6(37).
55
Syl. Pt. 8, Vest v. Cobb, 138 W. Va. 660, 76 S.E.2d 885 (1953).
56
Syl. Pt. 5, State v. General Daniel Morgan Post No. 548, V.F.W., 144 W. Va.
137, 107 S.E.2d 353 (1959).
57
See also W. Va. Code § 31-15-9(a) (1989).
23
authorizes the next steps specified in the Resolution: leasing the Project Property to
Rockwool, as well as WVEDA’s sale of the Project Property to Rockwool at the end of the
lease term. In sum, by the plain terms of the Act, the Legislature has authorized WVEDA
to engage in the transactions specified in the Resolution and which comprise the sale-
leaseback. 58 For the reasons discussed above, WVEDA has not exceeded the powers
granted it by the Legislature in the Act by adopting the Resolution to enter the sale-
leaseback.
2. W. Va. Code §§ 31-15-17 and 11-3-9
The Foundation next contends that West Virginia Code § 31-15-17
(exempting property acquired or used by WVEDA from taxation) conflicts with West
Virginia Code § 11-3-9, in which the Legislature has designated various species of property
exempt from taxation. The Foundation again argues that the Legislature has not enacted
an express exemption “for the type of sale-leaseback arrangement that Rockwool will
58
The Foundation’s contention that the Legislature’s findings, articulation of the
purposes of WVEDA, and broad grant of power to WVEDA are irrelevant to the
application of the Act in this case because, in the Foundation’s words, “the [Authority] can
work to accomplish its objectives and purposes without providing to [Rockwool], a foreign
private corporation, a tax exemption via the use of the sale-leaseback scheme at issue here.”
Again, where a statute is clear, a court’s role is to apply it. Application of the clear
language of § 31-15-6 to the sale-leaseback arrangement described in the Resolution results
in one conclusion: the Legislature has authorized WVEDA to conduct the transactions
comprising the sale-leaseback. It is not for this Court to read into the Act a prohibition on
the structuring of those authorized transactions in the manner described in the Resolution;
we will not “‘read into [a statute] that which it does not say.’” Rowe v. Sisters of Pallottine
Missionary Soc’y, 211 W. Va. 16, 25, 560 S.E.2d 491, 500 (2001) (quoting Banker v.
Banker, 196 W.Va. 535, 546–47, 474 S.E.2d 465, 476–77 (1996)).
24
enjoy,” so that the sale-leaseback is a de facto, unauthorized exemption from ad valorem
taxation for Rockwool’s property under § 31-15-17.
Section 11-3-9 is a manifestation of the Legislature’s authority to enact
exemptions from taxation, with the bounds of Article X, § 1, which in turn provides that
Subject to the exceptions in this section contained,
taxation shall be equal and uniform throughout the State, and
all property, both real and personal, shall be taxed in proportion
to its value to be ascertained as directed by law. * * * but
property used for educational, literary, scientific, religious or
charitable purposes, all cemeteries, public property * * * may
by law be exempted from taxation.
Article X, § 1 “does not [itself] exempt property from taxation;” instead, it “empowers the
legislature to create exemptions for certain types of property.” 59
The Legislature has exercised that power to enact certain exemptions in West
Virginia Code § 11-3-9. The Foundation contends that the statute is an “exhaustive list of
property tax exemptions” enacted by the Legislature and that because the statute does not
include “real and personal property owned and leased pursuant to the terms of the
RESOLUTION at issue here,” it is an illegal tax exemption. The Foundation first
highlights a perceived conflict between those property interests and the exemptions from
taxation enacted by the Legislature in § 11-3-9(a)(2) and (3) for “[p]roperty belonging
59
Wellsburg Unity Apts., Inc. v. Cnty. Comm’n of Brooke Cty., 202 W. Va. 283,
286, 503 S.E.2d 851, 854 (1998).
25
exclusively to the state,” and “[p]roperty belonging exclusively to any county, district, city,
village or town in this state and used for public purposes” respectively.
The Foundation also suggests that the sale-leaseback conflicts with certain
exemptions available under § 11-3-9 to charities; nonprofit power, water, natural gas, and
sewer services; nonprofit economic development corporations; benevolent associations;
and homes for children, the aged, or the infirm. 60 Those exemptions from taxation of
property held by private organizations hinge on whether the relevant property is leased out
or conducted for private profit; according to the Foundation, that caveat demonstrates that
the “Legislature has not provided tax exemptions to a project owned, operated or leased
out for private profit.” 61 Because Rockwool—a private, for-profit enterprise—will lease
the Project Property under the terms of the sale-leaseback, the Foundation contends that
the sale-leaseback itself violates § 11-3-9. 62
The Foundation’s arguments are unavailing. We first reiterate the
conclusions stated above: Rockwool has not claimed that § 31-15-17 applies to its interest
in the Project Property (either fee or leasehold) and the sale-leaseback is a series of
60
See W. Va. Code § 11-3-9(a)(12), (13), (14), (16), and (19).
61
Emphasis in original.
62
The Foundation asserts in its brief, “Notwithstanding how [Rockwool and
WVEDA] wish to characterize the Rockwool project, and notwithstanding a leasehold term
or otherwise, an express exemption has not been adopted for the type of sale-leaseback
arrangement that Rockwool will enjoy.”
26
legislatively-authorized transactions, and not a tax exemption. And, even accepting the
Foundation’s baseline premise that WVEDA relied upon § 31-15-17 to adopt the
Resolution, we do not agree with the Foundation that § 31-15-17 is in fatal conflict with §
11-3-9. Section 11-3-9 is not—by its plain terms—an exhaustive list of the types of
property the Legislature has exempted from taxation. 63 While the Foundation emphasizes
§ 11-3-9(a)(2) and (3) and the exemptions granted to charitable organizations subject to
certain conditions, it does not account for § 11-3-9(a)(30), which exempts from taxation
“[a]ny other property or security exempted by any other provision of law.” 64 This section,
then, allows for the existence of exemptions from taxation elsewhere in the Code; § 31-15-
63
Were §§ 31-15-17 and 11-3-9 in “apparent conflict, the Court must, if reasonably
possible, construe such statutes so as to give effect to each.” Syl. Pt. 4, in part, State ex rel.
Graney v. Sims, 144 W. Va. 72, 105 S.E.2d 886 (1958). “The general rule of statutory
construction requires that a specific statute be given precedence over a general statute
relating to the same subject matter where the two cannot be reconciled.” Syl. Pt. 1, UMWA
by Trumka v. Kingdon, 174 W. Va. 330, 325 S.E.2d 120 (1984). Applying that rule here,
§ 31-15-17, as the more specific statute, takes precedence over § 11-3-9, so that the conflict
would be resolved in favor of § 31-15-17.
64
W. Va. Code § 11-3-9(a)(30).
27
17 is an example. 65 For those reasons, it is apparent that § 31-15-17 does not conflict with
§ 11-3-9, and the Foundation is not entitled to relief on this assignment of error. 66
3. Article X, §1 of the West Virginia Constitution
Finally, the Foundation contends that the sale-leaseback violates Article X,
§ 1 of the West Virginia Constitution. Article X, § 1 of the West Virginia Constitution
requires that, subject to the exceptions listed there, “taxation shall be equal and uniform
through the state, and all property, both real and personal, shall be taxed in proportion to
its value to be ascertained as directed by law.” The Foundation argues that this Court’s
cases have articulated “dual concerns about inequality with regards to tax exemptions of
private enterprises,” namely that those exemptions excuse some taxpayers from paying
their fair share in support of the State and advantage some private enterprises over others.
The Foundation asserts that the sale-leaseback is a “sham structure perpetrated for
Rockwool” and that it “hide[s] a huge tax break for a strictly private, profit-making
65
The Foundation states that West Virginia Code § 8-19-4 (2020) (exempting from
taxation “the real and personal property which a municipality or county has acquired and
constructed according to the provisions of this article, and any leasehold interest therein
held by other persons”) expressly provides for the type of sale-leaseback detailed in the
Resolution, then states that § 31-15-17 does not. But that contrast is of no moment; the
sale-leaseback is predicated on the powers of WVEDA enumerated in § 31-15-6 and not
on the extension of § 31-15-17 to the leasehold interest resulting from the sale-leaseback.
66
This Court has recognized that the Legislature may enact tax exemptions beyond
§ 11-3-9 so long as the exemption does not exceed the authority granted to the Legislature
in Article X, § 1 of the West Virginia Constitution. See Demus, 148 W. Va. at 406, 135
S.E.2d at 358 (1964) (legality of tax exemption statute in IDBA judged against Article X,
§ 1 of the West Virginia Constitution).
28
enterprise.” For those reasons, the Foundation concludes that, the sale-leaseback itself
violates Article X, § 1 of the West Virginia Constitution. 67
Like the Business Court, we do not find the Foundation’s argument
persuasive. As observed above, the Resolution details a series of transactions—which the
Act authorizes WVEDA to conduct—that will result in WVEDA holding a fee interest in
the Project Property and Rockwool holding a lease in the same. Those interests are distinct,
as “[a] leasehold, separate from the fee from which it has been carved, is property ‘which
the law recognizes as a thing of value, but is incorporeal and intangible in its nature.’”68
Fundamentally, the Resolution does not purport to exempt property from taxation nor does
it contain any representation that the exemption from taxation applicable to property
acquired or used by WVEDA is to be extended to Rockwool’s leasehold interest.
Instead, as Rockwool concedes, the leasehold generated by the sale-
leaseback will be subject to the general rules of valuation of a leasehold, set out in Syllabus
Points 1 and 2 of Great A & P:
67
The Foundation’s reliance on Maier to support this constitutional argument is
misplaced. We have already observed that in Maier, the issue was whether the tax
exemption under the IDBA applied to a county-owned industrial site could be extended to
the warehouse operator’s lease of that site. We held that assessment of the leasehold did
not violate the exemption under the IDBA. In contrast, the sale-leaseback does not entail
extension of the tax exemption in § 31-15-17 to the leasehold interest created in
Rockwool—a key and dispositive distinction from Maier.
68
Greene Line, 122 W. Va. at 483, 10 S.E.2d at 903 (quoting Dillon v. Bare &
Carter, 60 W.Va. 483, 490, 56 S.E. 390, 393 (1906)).
29
1. The assessor of a county may assess the value of
a leasehold as personal property separately in an amount such
that when the value of the freehold subject to the lease is
combined with the value of the leasehold the total reflects the
true and actual value of the real property involved.[69]
2. The county assessor may presume that
leaseholds have no value independent of the freehold estate and
proceed to tax all real property to the freeholder at its true and
actual value; the burden of showing that a leasehold has an
independent value is upon the freehold taxpayer and the
taxpayer must request in a timely manner the separate listing
of freehold and leasehold interests.[70]
In sum, the Resolution does not purport to exempt the leasehold produced by
the sale-leaseback from taxes. 71 And as Rockwool acknowledges, the leasehold resulting
from the sale-leaseback will be subject to the same principles of valuation applicable to all
69
Syl. Pt. 1, Great A & P Tea Co., 167 W. Va. at 53, 278 S.E.2d at 354.
70
Syl. Pt. 2, id. (emphasis added).
71
The Foundation’s brief is unclear as to whether it contends that application of the
exemption in § 31-15-17 to WVEDA’s freehold interest in the Project Property that results
from the sale-leaseback violates Article X, § 1. But that argument cannot prevail because
we have held that “[w]hether or not property other than cemeteries and public property
may be exempted from taxation under the Constitution of this state is to be determined by
the use to which it is applied.” Syl. Pt. 4 of Reynolds Mem. Hosp. v. Marshall Cnty. Ct.,
78 W. Va. 685, 90 S.E. 238 (1916) (emphasis added). So, the use to which the Authority
(a state instrumentality) puts the property it owns or acquires in furtherance of what the
Legislature has found to be a public purpose cannot determine of the applicability of the
exemption crafted by the Legislature in § 31-15-17. And, in Demus, we held that a tax
exemption in the IDBA like § 31-15-17 did not violate Article X, § 1. Demus, 148 W. Va.
at 398, 135 S.E.2d at 352. While the Maier Court later held that the lessor of county-owned
property in that case could not claim the IDBA exemption for his leasehold interest, that
holding does not speak to the applicability of the exemption to the county’s freehold
interest.
30
leaseholds. 72 Consequently, neither the Resolution nor the sale-leaseback violates Article
X, § 1 of the West Virginia Constitution. 73
IV. CONCLUSION
For the reasons discussed above, the February 24, 2021 orders dismissing
with prejudice the Foundation’s complaint for declaratory judgment are affirmed.
AFFIRMED
72
Syllabus Point 2 of Great A&P articulates a presumption of no-value. But an
assessor may yet value a leasehold separately and independently from the freehold if it is
a “‘bargain lease, and is freely assignable so that the lessee may realize the benefit of such
bargain in the marketplace.’” Musick v. Univ. Park at Evansdale, LLC, 241 W. Va. 194,
203, 820 S.E.2d 901, 910 (2018) (Musick II) (quoting Maplewood Comm., Inc. v. Craig,
216 W. Va. 273, 607 S.E.2d 379 (2004)).
73
The Foundation also contends that reversal is warranted because the Business
Court failed to consider its claim that § 31-15-17 is, “on its face, vague, overly broad,
irrational, unreasonable and/or violates [the Foundation’s] rights under Article III, Section
10 . . . of the West Virginia Constitution.” As stated above, the sale-leaseback is comprised
of a series of transactions to be affected by WVEDA pursuant to its authority under
§ 31-15-6. The Resolution does not claim to extend the tax exemption afforded to property
acquired or used by WVEDA in § 31-15-17 to the leasehold produced by the sale-
leaseback. Consequently, the Foundation’s claim that § 31-15-17 violates Article III, § 10
of the West Virginia Constitution is moot.
31