HB2581 SFA #1 NELSON AND MARONEY 4-9

Dean  7824

Senators Nelson and Maroney moved to amend the Judiciary Committee amendment on page three, section ten, lines fifty-seven through sixty-three, by striking out all of subdivision (3) and inserting in lieu thereof a new subdivision (3), to read as follows:

(3) The Tax Commissioner shall, no later than July 1, 2021, propose emergency rules in accordance with §29A-3-15 of this code regarding valuation of property producing oil, natural gas, natural gas liquids, or any combination thereof.  For purposes of the emergency rules required by this subdivision regarding valuation of property producing oil, natural gas, natural gas liquids, or any combination thereof, fair market value shall be determined through the process of applying a yield capitalization model to the net proceeds.  Net proceeds shall mean actual gross receipts on a sales volume basis determined from the actual price received by the taxpayers as reported on the taxpayer’s returns, less royalties, and less actual annual operating costs as reported on the taxpayer’s returns.  For the purposes of this subdivision:

(A) “Natural gas liquids” means propane, ethane, butanes, and pentanes (also referred to as condensate), or a combination of them that are subject to recovery from raw gas liquids by processing in field separators, scrubbers, gas processing and reprocessing plants, or cycling plants.

(B) “Actual annual operating costs” shall include lease operating expenses, lifting costs, gathering, compression, processing, separation, fractionation, and transportation charges.

Adopted

Rejected