Oil and Gas Price Escalation Factors per Property Tax Code, Section 23.175
P&A has finalized the Section 23.175 calculation required to derive the oil and
gas price escalation scenarios for the 2022 tax year.
The EIA’s price projections which form the basis of our Price Adjustment Factor
calculations can be found at https://www.eia.gov/analysis/reports.php#/T186. Please search
for either AEO (Annual Energy Outlook) or STEO (Short-Term Energy Outlook), whichever
one is applicable for the current tax year. The price escalatory factors for years
2-6 in our discounted cashflow appraisals are calculated with reference to Producer
Price Index (PPI) Commodity Data information which can be found at https://data.bls.gov/cgi-bin/srgate. Please search for series
id WPU0561 (oil) or WPU0531 (natural gas).
In addition, see how these factors produce P&A's reference price forecasts for oil and gas, with a comparison
to the previous tax year's oil and gas price forecasts. Please note, the oil
and gas price forecasts for the current tax year may or may not be similar to those
used for the previous tax year, for both oil and gas. However, it should be noted
that the valuation of mineral interests depends on more than price alone. Forecasts
of oil and gas production and expense levels as of January 1 also figure prominently
into the calculations. Expense levels tend to follow price movement in a lagging
(less volatile) fashion, while production tends to decline over time as a natural
result of changing reservoir conditions (pressure loss, recovery percentage, etc.).
Therefore a price difference by itself does not fully indicate how current valuations
will compare with valuations performed for any previous tax year.
As always, we welcome any thoughts or suggestions you have regarding our appraisal
work, etc. We are here to serve the taxpayers in the most efficient, timely and
fair manner possible.
Business Personal Property Rendition
Deadlines.
Beginning tax year 2020, the Texas Legislature via SB2 repealed subsection (c) of
Property Tax Code, Sec.22.23, relating to the April 1 rendition deadline they installed
beginning tax year 2018, and the extension of that deadline, for property located
in an appraisal district in which one or more taxing units exempt freeport property
under Tax Code Section 11.251. Effectively this moves the rendition deadlines back
to the way they were administrated prior to tax year 2018.
However the Texas Legislature retained the April 30 rendition deadline for many
types of regulated Utility property (pipelines, electric, railroad, telecom, etc.).
But they amended subsection (d) to modify the extension of the rendition deadline
for these types of regulated utility properties, from an authorization of the chief
appraiser to extend the filing deadline 15 days for good cause shown in writing
by the property owner to requiring the chief appraiser to extend the deadline
to May 15 on written request by the property owner, and authorizing
the chief appraiser to further extend the deadline an additional 15 days for good
cause shown in writing by the property owner. Because "good cause" is subjective
and therefore easy to refute, this change in the law effectively provided regulated
utility taxpayers an additional 15 days to file renditions.
Is your property subject to this April 30 rendition deadline? The answer is "yes"
if the property is regulated by the Public Utility Commission of Texas (PUC), the
Railroad Commission of Texas (RRC), the federal Surface Transportation Board (STB),
or the Federal Energy Regulatory Commission (FERC).
All these deadlines apply equally to renditions or 22.01(h) or (i) property reports
provided to either appraisal districts or their contracted appraisal firms in lieu
of renditions.
Each year the comptroller and each chief appraiser shall publicize in a manner reasonably
designed to notify all property owners the requirements of the law relating to filing
rendition statements and property reports and of the availability of forms. A person
required to render property or to file a report as provided by this chapter shall
use a form that substantially complies with the appropriate form prescribed or approved
by the comptroller.
Appraisal districts are not obligated to mail rendition forms to property owners,
although many do only as a courtesy. Property owners can find and print approved
rendition forms directly from the Comptroller’s website:
https://www.comptroller.texas.gov/taxes/property-tax/forms/
Which form to use depends on the type of property being rendered. Each form requires
a property owner to furnish the information necessary to identify the property and
to determine its ownership, taxability, and situs. A property owner can (but is
not required to) furnish additional information on the form, including a good faith
estimate of value. A tax agent (but not the property owner) is required to swear
that the information provided in the rendition is true and accurate to the best
of their knowledge and belief.
Substantial tax penalties can accrue for failure to timely file a rendition or if
the property owner or agent is found to have committed fraudulent conduct in an
inspection, determination, or other proceeding before the appraisal district.
More information is available in the Texas Property Tax Code, Chapter 22 (Renditions
and Other Reports), such as what persons and which property is covered by this business
personal property rendition law.
New Economic Obsolescence Appraisal
Policy for Pipelines