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  County Treasurers and
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TITLE 39

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Valuation and Taxation

ARTICLE 7

Valuation of Oil and Gas Leaseholds and Lands

39-7-101. Statement of owner or operator.

            (1) Every operator of, or if there is no operator, every person owning any oil or gas leasehold or lands within this state, either as a single lease or as a unit, which leaseholds or lands are producing or are capable of producing oil or gas on the assessment date of any year, shall, no later than the fifteenth day of April of each year, prepare, sign under the penalty of perjury in the second degree, and file in person or by mail with the assessor of the county wherein such oil and gas leaseholds or lands are located a statement for such lease or unit, on a form prescribed by the administrator, showing:

            (a) The location thereof and the name thereof, if there is a name;

            (b) The name, address, and fractional interest of the operator thereof;

            (c) The number of barrels of oil, or the quantity of gas measured in thousands of cubic feet, sold or transported from the premises during the calendar year immediately preceding, after separately reporting the number of barrels of oil, or the quantity of gas measured in thousands of cubic feet, delivered to the United States government or any agency thereof, the state of Colorado or any agency or political subdivision thereof, or any Indian tribe as royalty during the calendar year immediately preceding;

            (d) The selling price at the wellhead. As used in this article, "selling price at the wellhead" means the net taxable revenues realized by the taxpayer for sale of the oil or gas, whether such sale occurs at the wellhead or after gathering, transportation, manufacturing, and processing of the product. The net taxable revenues shall be equal to the gross lease revenues, minus deductions for gathering, transportation, manufacturing, and processing costs borne by the taxpayer pursuant to guidelines established by the administrator.

            (e) The name, address, and fractional interest of each interest owner taking production in kind and the proportionate share of total unit revenue attributable to each interest owner who is taking production in kind;

            (f) A declaration made under the penalty of perjury in the second degree that includes the following:

            (I) A statement that the owner or operator has personally examined the statement described in this section and that such statement sets forth, to the best of the owner's or operator's knowledge and belief, the information required by this section; and

            (II) A statement by the owner or operator as follows:

"No representations are made as to the accuracy of the value of any portion of the production from subject property that is taken in kind by any owner other than the undersigned."

            (1.5) Any nonoperating interest owner in an oil or gas well may, on or before the fifteenth day of March each year, submit to the operator by certified mail a report of the actual net taxable revenues received at the wellhead and the actual exempt revenues received at the wellhead by such owner for production taken in kind from the property during the calendar year immediately preceding. Operators shall use the information reported pursuant to this subsection (1.5) to determine the selling price at the wellhead. If any nonoperating interest owner fails to provide to the unit operator the information required under this subsection (1.5) by March 15 of each year, such operator shall use the selling price at the wellhead received by such operator for such operator's share of production from such unit in place of such nonreported information, and the amount of tax for which such nonreporting, nonoperating interest owner is liable shall be calculated based on the selling price at the wellhead reported by the operator.

            (2) (a) If a statement of an owner or operator is not received or postmarked on or before by the fifteenth day of April of each year, the assessor may impose on such owner or operator a late filing penalty in the amount of one hundred dollars for each calendar day the statement is delinquent; except that such late filing penalty shall not exceed three thousand dollars in any calendar year. The assessor may grant an extension of time for filing a statement to any operator or owner. Any extension, and its length, shall be granted solely at the discretion of the assessor.

            (b) This subsection (2) is effective January 1, 1997.

            (3) (a) The assessor may require the owner or operator to submit written documentation supporting the information provided in the statement. Such documentation shall be supplied within thirty days after either the date of the postmark on the assessor's written request for such documentation or the date that an owner or operator is required to file a statement pursuant to subsection (1) of this section, whichever is later. Any owner or operator who willfully fails or refuses to comply with the assessor's request for written documentation may be assessed a fine of one hundred dollars for each day of such willful failure or refusal. The total amount of all fines that may be assessed by an assessor against an owner or operator in any calendar year shall not exceed three thousand dollars, regardless of the number of leases or units owned or operated by such owner or operator or the number and length of such willful failures or refusals by such owner or operator.

            (b) This subsection (3) is effective January 1, 1997.

            (4) All statements and documentation filed with the assessor shall be considered private documents and shall be available on a confidential basis only to the assessor, the administrator, the annual study contractor hired pursuant to section 39-1-104, the executive director of the department of revenue, and their employees. Such statements and documentation shall be available on a confidential basis to the board of assessment appeals and the county board of equalization when information in such statements and documentation is pertinent to an appeal or protest.

            (5) (a) Fines imposed pursuant to this section shall be fees of the office of the county assessor. Any unpaid fines imposed pursuant to this section shall be certified to the county treasurer by January 1 of each year and shall be included in the delinquent owner's or operator's property tax statement issued pursuant to section 39-10-103.

            (b) This subsection (5) is effective January 1, 1997.

39-7-102. Valuation for assessment. 

            (1) Except as provided in subsection (2) of this section, on the basis of the information contained in such statement, the assessor shall value such oil and gas leaseholds and lands for assessment, as real property, at an amount equal to eighty-seven and one-half percent of:

            (a) The selling price of the oil or gas sold therefrom during the preceding calendar year, after excluding the selling price of all oil or gas delivered to the United States government or any agency thereof, the state of Colorado or any agency thereof, or any political subdivision of the state as royalty during the preceding calendar year;

            (b) The selling price of oil or gas sold in the same field area for oil or gas transported from the premises which is not sold during the preceding calendar year, after excluding the selling price of all oil or gas delivered to the United States government or any agency thereof, the state of Colorado or any agency thereof, or any political subdivision of the state as royalty during the preceding calendar year.

            (2) In order to promote the initiation or continuation of secondary recovery, tertiary recovery, or recycling projects which conserve and avoid waste of oil and gas, the assessor shall value oil and gas leaseholds and lands employing such projects for assessment as provided in subsection (1) of this section but at an amount equal to seventy-five percent of:

            (a) The selling price of the oil or gas sold therefrom during the preceding calendar year, after excluding the selling price of all oil or gas delivered to the United States government or any agency thereof, the state of Colorado or any agency thereof, or any political subdivision of the state as royalty during the preceding calendar year;

            (b) The selling price of oil or gas sold in the same field area for oil or gas transported from the premises which is not sold during the preceding calendar year, after excluding the selling price of all oil or gas delivered to the United States government or any agency thereof, the state of Colorado or any agency thereof, or any political subdivision of the state as royalty during the preceding calendar year.

39-7-102.5. Calendar for notice of valuation and appeals. 

            Notwithstanding any other provisions to the contrary, lands and leaseholds valued pursuant to this article shall follow the schedule for personal property set forth in this title regarding notices of valuation and appeals of valuation.

39-7-102.7. Notice of valuation - public record. 

            The assessor shall retain a copy of all notices of valuation for lands and leaseholds valued pursuant to this article, and such copies shall be public records that are available for inspection in accordance with part 2 of article 72 of title 24, C.R.S.

39-7-103. Surface and subsurface equipment valued separately. 

            All surface oil and gas well equipment and submersible pumps and sucker rods located on oil and gas leaseholds or lands shall be separately valued for assessment as personal property, and such valuation may be at an amount determined by the assessors of the several counties of the state, approved by the administrator, and uniformly applied to all such equipment wherever situated in the state. All other subsurface oil and gas well equipment, including casing and tubing, shall be valued as part of the leasehold or land under section 39-7-102.

39-7-104. Failure to file statement. 

            If any person owning or operating any oil and gas leaseholds or lands producing or capable of producing oil or gas on the assessment date fails or refuses to prepare and file the statement required by the provisions of section 39-7-101, then the assessor shall list such property and value the same for assessment on the basis of the best information available to and obtainable by him.

39-7-105. Assessor to examine books, records. 

The assessor has the authority and right at any time to examine the books, accounts, and records of any person owning or operating such oil and gas leaseholds and lands in order to verify the statement filed by such person, and, if from such examination he finds such statement or any material part thereof to be willfully false and misleading, he shall proceed to value such oil and gas leaseholds or lands for assessment as though no statement had been filed.

39-7-106. False statement - penalty. 

If any person required to file such statement willfully and knowingly subscribes to any false statement contained therein, he is guilty of perjury in the second degree and upon conviction shall be punished according to law.

39-7-107. Oil and gas lands in more than one county. 

(1) Whenever any oil and gas leaseholds or lands are situated partly in one county and partly in another county or in lesser political subdivisions, the person making the statement required by the provisions of section 39-7-101 shall allocate the production value between such counties or lesser political subdivisions in the proportion that the surface acreage of such oil and gas leaseholds or lands situated within each such county or lesser political subdivision bears to the total surface acreage thereof.

            (2) Whenever a group of contiguous oil and gas leaseholds or lands operated as a unit is situated partly in one county and partly in another county or lesser political subdivisions, the person making the statement required by the provisions of section 39-7-101 shall assign to each county or lesser political subdivision that portion of the production value from the unit as is assigned by the unit agreement to the oil and gas leaseholds or lands actually situated in each such county or lesser political subdivision.

            (3) Whenever any oil and gas leaseholds or lands are situated partly in one county and partly in another county, a copy of the statement required by the provisions of section 39-7-101 shall be filed with the assessor of each such county.

39-7-108. Collection. 

Beginning January 1, 1980, when taxes on oil and gas leaseholds and lands are due, such taxes shall be a debt due from the owner or the unit operator as the case may be and shall be recoverable by the treasurer by direct action in debt; except that such taxes treated as debt due from a fractional interest owner shall not exceed the amount of taxes for which the fractional owner is liable, as provided in section 39-10-106. The treasurer may also collect such debt as if the property were personal property.

39-7-109. Valuation of severed nonproducing oil or gas mineral interests. 

(1) The actual value of severed nonproducing oil or gas or oil and gas mineral interests shall be determined by the income approach capitalizing the annual net rental income for such nonproducing mineral interests at an appropriate market rate. If such severed mineral interests are unleased, the assessor shall use the average per acre annual rental of all such mineral interests under lease in the county or in the area to determine the actual value thereof.

            (2) For the purposes of this section, "annual rental" means annual rental payments, or other compensatory payments payable for the right to hold a mineral interest, which payments are fixed and certain in amount and payable periodically over a fixed period calculated on a twelve-month basis. "Annual rental" shall be the representative annual rental for such mineral interests leased within the county or the area, and "annual rental" does not include royalty payments, advanced royalty payments, bonus payments, or minimum royalty payments covering periods when the mineral interests are not in production, even though said payments may be fixed and certain in amount and payable periodically. For the purposes of this subsection (2), "royalty payments", "advanced royalty payments", and "minimum royalty payments" are payments attributable to a portion of the current or future mineral production of a mineral interest, paid for the privilege of producing minerals, and "bonus payments" means compensation paid as consideration for the granting of a mineral lease or other compensatory payments which are payable regardless of the extent of use of the mineral interest and which are fixed and certain in amount and may be payable in one or more periodical increments over a fixed period.

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