News & Interest
P&A Statement Concerning COVID-19 Coronavirus
Please see this statement from P&A concerning the COVID-19 coronavirus which we are all dealing with as best we can from both
a personal and professional perspective. This statement from P&A may change over
time, so check back often for the latest P&A news. Thank you, and stay healthy
Business Personal Property Rendition Deadlines
Have Changed Again!
Beginning tax year 2020, the Texas Legislature via SB2 repealed subsection (c) of Property Tax Code, Sec.22.23, relating to the April 1 rendition deadline they installed beginning tax year 2018, and the extension of that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:
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.
Oil and Gas Price Escalation Factors per Property Tax Code, Section
P&A has finalized the
Section 23.175 calculation required to derive the oil and gas price
escalation scenarios for the 2020 tax year.
It should be noted the EIA has published a current Annual Energy Outlook (AEO)
which can be used to calculate the Price Adjustment Factors (that are a part of
the derivation of the year 1 price in our discounted cashflow appraisals of
mineral interests) referencing prices published in Tables 12 and 13. The EIA's
most recent version of their AEO can be found at
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 are considerably lower than 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
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.
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
for more details.
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
for more details.