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News & Interest

 

Additional Valuation Information for RI Owners (Tax Year 2017)

Hey royalty owners, tired of your market values going down, down down? Well cheer up, better times are now here! Seriously though, the oil and natural gas price forecasts in our appraisals of your mineral interests for tax year 2017 are more optimistic than the downright pessimistic forecasts used in the last year's appraisals. This has resulted in a substantial increase in many owners' mineral interest values for property tax purposes.

By definition, price forecasts are always forward-looking as of the date they're made. For property tax purposes, the "as of" date applicable to each tax year is January 1, and every tax year stands on its own. The outlook as of January 1, 2016 was not pretty, and our appraisals reflected it. Twelve months later, the outlook as of January 1, 2017, while still not what everybody would like it to be, is substantially less gloomy. For more explanation and comparison to previous years, please see this << link >>  for oil leases, and this << link >>  for gas leases.

For more detail about our oil and gas price forecasts made for property tax purposes, please see the news item below discussing Sec. 23.175 of the Texas Property Tax Code.



Oil and Gas Price Escalation Factors per Property Tax Code, Section 23.175

Pritchard & Abbott, Inc. was pleased to recently make a presentation to La Salle, Frio and Zavala county taxpayers in Cotulla, Texas, regarding the appraisal of oil and gas mineral interests for property tax purposes. Click on this << link >>  to view the PowerPoint presentation we showed last Friday, May 15, 2015. To view this file you may need to download free viewer software from Microsoft that works with PowerPoint "show" files:
Download Microsoft PowerPoint Viewer Here


New Economic Obsolescence Appraisal Policy for Pipelines

P&A is committed to the uniform and accurate appraisal of all pipelines. Beginning tax year 2015 we’ve instituted a new policy regarding pipelines we appraise using the Cost Approach. Specifically, we’re amending the way we provide for Economic Obsolescence (a form of depreciation) based on “utilization” (throughput versus capacity of the pipeline). Although we’re not amending the formula itself we’ve used for many years now (a variation of the Chilton equation), we are striving for more clarity in the throughput and capacity figures required in the formula. Please see this throughput appraisal policy memo  for details. Thank you for your understanding and cooperation. Please feel free to contact any of our utility appraisers if you have any questions.



New Hyperbolic Production Forecast Feature in P&A Mineral Appraisals


We've improved our production forecast abilities by incorporating a hyperbolic formula using parameters from Aries decline curve software. See this explanation  for more details.




Business Personal Property Renditions are due by April 15!

Rendition statements and property reports must be delivered to the chief appraiser after January 1 and not later than April 15, except as provided by Tax Code §22.02. On written request by the property owner, the chief appraiser shall extend a deadline for filing a rendition statement or property report to May 15. The chief appraiser may further extend the deadline an additional 15 days upon good cause shown in writing by the property owner.

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.



Outsourcing to Contract Appraisal / Software Firms

From time to time we get questions from clients (or potential clients) who want to know the functions or purpose of a private consulting firm like Pritchard & Abbott, Inc. What role(s) do appraisal and software firms have regarding ad valorem tax in Texas, when Appraisal Districts and taxing entities were specifically created by the Texas legislature to handle these matters? See this outsourcing discussion  for more details.




Web Links:

    APPRAISAL DISTRICT DIRECTORY

    LEGISLATIVE                                     ORGANIZATIONS - TEXAS

    OIL/GAS ASSOCIATIONS                    RAILROAD COMMISSION OF TEXAS                   

    OIL/GAS PRICING                               SEARCHERS / MAPS