[Congressional Record Volume 145, Number 108 (Wednesday, July 28, 1999)]
[Extensions of Remarks]
[Pages E1675-E1679]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
RELIEF FROM INTEREST AND PENALTIES ON FERC REFUNDS
______
HON. DENNIS MOORE
of kansas
in the house of representatives
Tuesday, July 27, 1999
Mr. MOORE. Mr. Speaker, on July 29, the House Commerce Subcommittee
on Energy and Power has scheduled a hearing on H.R. 1117, legislation
introduced by my colleague from Kansas, Jerry Moran, and cosponsored by
the entire Kansas House delegation.
This legislation would provide relief from unfair interest and
penalties on refunds retroactively ordered by the Federal Energy
Regulatory Commission. For two decades, FERC allowed gas producers to
obtain reimbursement for payment of the Kansas ad valorem tax on
natural gas. In a series of orders, FERC repeatedly reaffirmed the
rights of gas producers to collect the ad valorem tax, rebuking various
challenges to this practice. In 1993, however, FERC reversed 19 years
of precedent and ruled that the ad valorem tax had not been eligible
for reimbursement. FERC has since ordered all producers operating
during a 5-year period in the 1980's to refund both principal and
interest associated with reimbursement of the ad valorem tax.
With this legislation hopefully headed toward consideration by the
full House of Representatives. I am taking this opportunity to place in
the Record a letter recently sent by Kansas Senate Democratic Leader
Anthony Hensley to House Commerce Committee Ranking Democrat John
Dingell, concerning the legislative history of ad valorem and severance
taxes in Kansas. This background will be very helpful to our colleagues
as they review this issue in the weeks ahead.
State of Kansas,
Office of Democratic Leader,
Topeka, KS, June 18, 1999.
Re: Kansas Ad Valorem Tax refund detrimental reliance on
federal law.
Hon. John D. Dingell,
House of Representatives, Committee on Commerce, Rayburn
House Office Building, Washington, DC.
Dear Congressman Dingell: On June 8, 1999, the House Energy
and Power Subcommittee held a hearing on the Kansas Ad
Valorem Tax refund issue. This issue is extremely important
to the State of Kansas and one of our most important
industries, the production of oil and gas. As a 23-year
veteran of the Kansas Legislature and as the Minority Leader
of the Kansas Senate, I am writing to request your support of
Congressman Jerry Moran's legislation to alleviate what I
believe is a serious miscarriage of justice.
I was a member of the Kansas Legislature in 1983 when
Governor John Carlin promoted and obtained passage of a
severance tax on oil and gas. Prior to 1983, Kansas did not
have a severance tax, only an ad valorem tax. At that time,
the ad valorem tax took approximately 3.1% of the value of
production and was revenue used by counties and local school
districts. Oklahoma and Texas, on the other hand, had
severance taxes in place for many years equal to 7.085% to
7.5% of the value of gas production. Wyoming had in place a
4% severance tax on oil and gas ``in addition to'' a 6.5%
property tax on oil and gas for a total tax burden of 10.5%.
Likewise, Colorado had a severance tax on gas ranging from
2%-5% ``in addition to'' a 5.4% property tax, for a total tax
burden of 7.4% to 10.4%.
As you know, federal law allowed purchasers to add all of
these taxes on to the Federal Power Commission's (FPC)
maximum lawful price when purchasing gas. In Wyoming and
Colorado, both a severance tax and a property tax were
permitted to be added to the maximum lawful price. Texas had
both a severance tax and a property tax, however, because of
the way its property tax was structured, it was allowed to
add on only the 7.5% severance tax to the FPC maximum lawful
price. The Kansas Attorney General requested clarification
from the FPC to determine whether Kansas' ad valorem tax
could lawfully be added to the FPC maximum lawful price. In
1974, Opinion 699-D clarified this issue and did allow the
Kansas ad valorem tax as a lawful addition to the price.
In 1981, the State of Kansas needed additional funding for
education, roads and infrastructure, and Governor Carlin
began studying the potential for a severance tax. One of our
state's most valuable natural resources was being depleted
and consumed out of state, pipelines were strewn across
Kansas, drilling equipment was taking its toll on Kansas
roads and infrastructure, and little benefit was being
derived by Kansas government. The price of gas at the
wellhead, sold in interstate commerce, was being controlled
by the federal government at prices far below fair market
value, resulting in the transfer of enormous wealth from
Kansas to out of state consumers. Texas, Oklahoma, Colorado,
Wyoming and other states were collecting taxes on oil and gas
at over twice the Kansas tax rate.
Governor Carlin proposed a severance tax which, when added
to the existing ad valorem tax, would be comparable to the
taxes on oil and gas production collected in other producing
states. The legislature studied various severance tax
proposals for three years. Oil and gas severance and property
tax in neighboring states were studied carefully. A
comparative chart used by the Senate Tax Committee is passing
the severance tax is enclosed with the attached Memo of
Severance and Property Taxes prepared by the Kansas
Legislative Research Department during the 1981 severance tax
debate.
One of the issues raised during legislative debate was
whether both a severance tax and an ad valorem tax on gas
could be added to the maximum lawful price of gas as
established by the Federal Energy Regulatory Commission
(FERC). We were advised that this was allowed in Wyoming,
Colorado and other producing states, and that FPC Opinions
699-D allowed the pass through of the Kansas ad valorem tax.
This Opinion had been specifically requested by the Kansas
Attorney General and the Kansas Legislature relied on Opinion
699-D without further question.
Finally, in 1983, the Kansas Legislature passed a severance
tax ``in addition to'' the existing ad valorem tax. A credit
against the severance tax for ad valorem taxes paid was added
to the bill resulting in a 7% severance tax on gas and a
4.33% tax on oil. Clearly,
[[Page E1676]]
tax policy for our state was based on the Legislature's
reliance on FPC Opinion 699-D. Were it not for our reliance
on Opinion 699-D, the severance tax would not have passed
without amending our state's ad valorem tax to conform to
federal requirements for pass through of both the severance
and ad valorem taxes as was done in Wyoming and Colorado.
When Kansas passed the severance tax in 1983, Northern
Natural Gas Company asked the FERC to reconsider its Opinion
699-D to prohibit Kansas producers from passing through both
a severance tax and a property tax. They were denied twice by
the FERC. In 1988, Colorado Interstate Gas Company appealed
the FERC decision to the Washington, D.C., Circuit Court of
Appeals. I am sure you are familiar with the whole scenario
that has followed. Nineteen years after Opinion 699-D was
issued, the FERC, with incentive from the Washington, D.C.,
Court in the Colorado Interstate Case, reversed itself. Later
the court would require retroactive refunds to 1983 based on
notice of hearings published in the federal register. Now,
because the Kansas Legislature relied on Opinion 699-D to
pass a severance tax without adjusting the methodology by
which the Kansas ad valorem wax was calculated, many Kansas
independent oil and gas producers are devastated.
What could the Kansas Legislature have done further to
determine the reliability of Opinion 699-D? Should we have
asked for a second ruling on the same issue? Would that have
allowed Kansas to rely on the Opinion? Would three, four or
five opinions have allowed Kansas to rely on the ruling? Was
there someone the State could have sued to get final
determination that we could rely on before we passed the
severance tax? How can a state ever rely on a federal
regulatory ruling if a court can in the future retroactively
change the law and require innocent victims who complied with
the law to refund large sums of money with interest?
Certainly Kansas producers have done their part to provide
consumers with an abundant supply of clean, cheap fuel. But
why are consumers up in arms? In 1998, the price of natural
gas paid to producers at the wellhead in Kansas averaged less
than $1.96 per mcf. The price of natural has at the
residential burner tip, however, averaged $6.82 in the
U.S.A., with prices ranging from less than $5 to over $12 per
mcf from time to time. Since FERC Order 636 passed, the price
of natural gas paid to producers at the wellhead has gone
down while the price of natural gas paid by residential
consumers has gone up. The middlemen's share of the
residential consumer's dollar has increased from 59% to 73%
while the producer's share has decreased from 41% to 27%.
Both producers and consumers are losers in this environment
while the giant interstate pipelines and local distribution
companies have seen profits rise dramatically.
Now, I understand, the primary beneficiaries of
deregulation--the interstate pipelines and local distribution
companies--are before the Energy and Power Subcommittee in
the name of consumer protection. How much of the refund will
ultimately reach the consumer is undetermined at this time,
but I am advised that any residential consumer likely will
receive no more than $15 over a period of time. However, the
total of these de minimis refunds, and what is not passed
through to the consumer, equals the estimated drilling and
exploration budget for all of Kansas for the next three and
one-half years.
As Democrats, we need to stand up for what is right and
fair in America. Consumer protection is an enormously
powerful political force but honest, hardworking producers
deserve no less. Kansas producers were perhaps the only
innocent parties in this entire scenario, caught between
consuming states whose people believe they have a right to
cheap fuel, and the governments of producing states who
believe they have a right to tax oil and gas producers into
oblivion.
This is not a consumer protection issue. I do not believe
that consumers in Kansas, Missouri, Colorado, Michigan or any
other state will benefit in any way from this restorative
reversal of law by the Federal Energy Regulatory Commission.
A minuscule refund to a long lost consumer cannot offset the
losses which will result from the destruction of honest,
hardworking, productive citizens. Exploration in Kansas is
almost totally dependent on small independent operators who
provide an invaluable resource to consumers across this
country. The destruction of this vital Kansas industry is not
in anyone's best interest. I strongly urge you to support
Congressman Moran's legislation to eliminate this serious
injustice.
Sincerely,
Anthony Hensley,
Kansas Senate Minority Leader.
____
On Or After January 1, 1973, And New Dedications Of Natural Gas To
Interstate Commerce On Or After January 1, 1973, Opinion No. 699-D
Declaratory Order on Petition for Clarification (Issued October 9,
1974)
Before Commissioners: John N. Nassikas, Chairman; Albert B.
Brooke, Jr., Rush Moody, Jr., William L. Springer, and Don S.
Smith.
The State Corporation Commission of the State of Kansas
(Kansas) on August 29, 1974, filed a request for
clarification of Opinion No. 699 concerning the right of
producers making jurisdictional sales in Kansas covered by
that opinion to adjust upward the national rate prescribed
therein by the amount of the Kansas ad valorem tax.
Opinion No. 699 provides in Ordering Paragraph A(3) (mimeo
p. 141) that the national rate established there ``shall be
adjusted upward for all State or Federal production,
severance, or similar taxes * * *''. The question presented
is whether the Kansas ad valorem tax is a similar tax within
the meaning of the above provision. A number of other states
also have an ad valorem tax, and our determination here will
not be limited to the Kansas ad valorem tax, but will apply
to ad valorem taxes in general.
As Kansas points out, the bulk of the Kansas ad valorem tax
is based upon production factors, and, as such, is in fact, a
severance or production tax merely bearing the title ``ad
valorem tax''. The ad valorem tax in some other states is
also similar to a production or severance tax inasmuch as it
is based on the amount of production and the revenues
therefrom. Consequently, we conclude that it is proper under
Opinion No. 699 for producers to adjust the national rate
upward for a state ad valorem tax where such tax is based on
production factors.
severance and property taxes on oil and gas
Background
This memorandum presents an overview of the severance taxes
and property taxes levied on oil and gas properties in the
major producing states and the states surrounding Kansas. A
summary of the severance tax rates and property taxes in such
states is contained in Table 1.
Severance Taxes. A severance tax is a tax imposed on the
production, or the ``severing,'' of a mineral from the earth.
The production of the mineral may be measured either by the
value or the volume of the mineral produced. Among states
basing a severance tax on the value of production, some tax
the gross value of production, while others tax a net value
figure, allowing deductions for expenses such as
transportation costs, federal or state royalties, losses from
evaporation or uneconomic production, and disposal of useless
byproducts such as salt water. The rate of severance taxes
based on value may be a fixed percentage of value or may be
graduated to apply lower rates to low-income or low-
production wells.
The rationale usually presented for imposing a severance
tax is that the state should be compensated for the
irretrievable loss of a nonrenewable resource and for the
cost to the state's residents resulting from the development
of that resource. States which have imposed severance taxes
have used those tax receipts for various purposes, including
school finance, property tax relief, highway finance,
creation of trust funds, and distribution to local
governmental units.
A severance tax may be either ``in lieu of'' or ``in
addition to'' property taxes on oil or gas properties. An
``in lieu of'' severance tax exempts oil and gas properties
from the general property tax.
Property Taxes. Taxes on real and personal property have
traditionally been a major source of funding for the
activities carried on by state and local governments.
Applying a property tax to oil and gas properties typically
involves determining the value of minerals in the ground and
the value of the production equipment. States imposing
property taxes have usually chosen one of three methods to
value the minerals: value of production; formula valuation;
or token assessment.
Annual production assessment applies the property tax levy
to the value of production, which might be either gross or
net value.
Formula valuation attempts to value reserves by estimating
the average life of a well, rate of discount, and the
estimated value of future production.
Token assessment would apply the property tax to a minimal
amount of value, either per acre of lease or per well.
National Summary
Severance taxes on oil and gas have been enacted in 27
states, including states such as Kansas which have enacted
relatively minor severance taxes based on the volume of
production for regulatory, rather than revenue, purposes.
Seventeen of those 27 states have enacted ``significant''
severance taxes--a tax at the rate of 2 percent or more of
value. Six of the 17 states with significant severance taxes
impose their tax in lieu of the property tax.
Kansas
Oil and gas leaseholds, including royalty interests and
equipment used in production, are assessed as tangible
personal property in Kansas. Guides for assessing oil and gas
properties have been prescribed by the Director of Property
Valuation, Department of Revenue, for use by county
appraisers. After appraised values are determined, the
properties are assessed at 30 percent of such values and are
subject to the total general property tax rate according to
the situs of the property.
According to Table 3, prepared by the Department of
Revenue, Division of Property Valuation, oil and gas
properties paid almost $95 million in property taxes in 1980,
up from $60.5 million in 1979.
According to the Kansas Geological Survey, oil and gas
production in Kansas for the last two years was as follows:
[[Page E1677]]
----------------------------------------------------------------------------------------------------------------
1979 1980
Unit ---------------------------------------------------------------
Quantity Value $(1,000) Quantity Value $(1,000)
----------------------------------------------------------------------------------------------------------------
Oil........................... 1,000 barrels... 56,995 $1,245,015 60,140 $2,049,581
Gas........................... million cubic 804,535 548,693 772,998 643,134
feet (m.m.c.f.).
---------------- ---------------
Natural Gas Liquids........... 1,000 barrels... 33,888 292,791 34,000 352,512
$2,086,499 $3,045,227
----------------------------------------------------------------------------------------------------------------
Thus, using the above oil and gas property tax figures,
property taxes statewide averaged 3.1 percent of value and
2.9 percent of value in 1980 and 1979, respectively. Of
course, the ratio of property taxes to value varies from
lease to lease and county to county.
The biggest factor in the increase in property taxes
between 1979 and 1980 was the increase in the price of oil.
The calculation of the value of the gross reserves of oil is
the most important step in valuing the oil lease. This value
is calculated by multiplying the total annualized production
for the previous year times a net price figure times a
present worth factor. In the 1979 Oil and Gas Appraisal
Guide, the highest price of stripper oil was $16.10; in 1980,
this same oil sold for approximately $38, and the net price
figure used in the 1980 Guide was $31.56. These price figures
reflect actual selling prices of oil and the world-wide
increases in prices. The 1981 net price figures are not yet
available.
Equipment values shown in the 1980 Guide were also higher
than those in the 1979 Guide. This increase was due to the
fact that the equipment values had not been updated for
several years and reflected the increase in the value of
equipment that has accompanied the increase in the price of
oil. The number of years of income considered was raised from
five to eight years; this also raised the valuation of the
property.
Several changes reflected in the 1980 Guide would have had
the effect of lowering values. These changes were raising the
discount factor and changing the low production credit. The
discount factor reflects the present value of money to be
received at a specified time in the future. The low
production credit is a reduction for wells with very low
production levels.
Changes in the 1981 Guide include accounting for
differences in production quality and expenses between
eastern and western Kansas wells. One such difference is that
the 1981 Guide will consider a 5 year income for the shallow
eastern Kansas wells, while an 8 year income will be used for
the deeper western Kansas wells.
In addition to the property tax, oil and gas producers,
like other businesses, also pay sales and income taxes. Oil
and gas producers also pay taxes or fees for antipollution
and conservation activities of the state. The oil and gas
production tax, for pollution control, is levied at the rate
of $.001 per barrel for each barrel of oil and $.00005 for
each one thousand cubic feet of gas produced. The
conservation assessment is $.003 per barrel of oil and $.0008
for each one thousand cubic feet of gas.
The Federal Energy Regulatory Commission has ruled that the
Kansas property tax is essentially based on production and
has allowed this tax to be ``passed-on'' to consumers. More
than one production tax on natural gas (the only type of
energy production whose price is still controlled) may be
passed on. Both the property tax and the two regulatory taxes
in Kansas are currently being passed on. Other states and the
F.E.R.C. have also reported that natural gas producers are
able to pass-on more than one production tax, as long as
intrastate and interstate sales of natural gas are taxed
equally.
A severance tax, if enacted in Kansas, would have an impact
on oil and gas property tax appraisals by lowering net prices
figures used in the Guide. The Guide uses the price actually
paid to the producer on January 1 of the assessment year less
state and federal wellhead taxes levied on value or volumes
produced, and less applicable transportation charges. Thus,
the federal Crude Oil Windfall Profit Tax (WPT) was deducted
from the sales price of oil. (Appended to this memorandum is
a summary of the Windfall Profit Tax.) An 8 percent severance
tax could lower the net price figure per barrel for oil from
$31.70 to $29.16, as follows:
Current sales price--1 barrel of oil.............................$38.00
Base price for WPT...............................................-17.00
__________
Windfall profit for WPT...........................................21.00
WPT rate for independents on stripper oil........................ x 30%
__________
WPT liability......................................................6.30
Current sales price--1 barrel of oil.............................$38.00
WPT liability.....................................................-6.30
__________
Net price with WPT...............................................$31.70
==========
_______________________________________________________________________
Windfall profit for WPT..........................................$21.00
WPT severance tax adjustment (8%).................................-1.68
__________
Net windfall profit...............................................19.32
WPT rate for independents on stripper oil........................ x 30%
__________
WPT liability......................................................5.80
Current sales price--1 barrel of oil.............................$38.00
Severance tax..................................................... x 8%
__________
Severance tax liability...........................................$3.04
WPT liability.....................................................$5.80
Severance tax liability...........................................+3.04
__________
WPT and severance tax liability...................................$8.84
Current sales price--1 barrel of oil.............................$38.00
WPT and severance tax liability...................................-8.84
__________
Net price with WPT and 8% severance tax..........................$29.16
==========
_______________________________________________________________________
The Legislative Research Department is not yet able to
estimate the effect of a severance tax on property tax
appraisals. A reduction in the net price figures does not
necessarily mean that assessed valuations of oil and gas
properties will fall--but it does at least mean that such
valuations would not be as high as they otherwise might be if
no severance tax were enacted. Decontrol of all oil prices,
and rising prices for oil and gas are some factors that could
lead to increases on oil and gas valuations, even if a
severance tax were enacted.
At least two opinions of former Kansas Attorneys General
have stated that either an ``in addition to'' or ``in lieu
of'' severance tax could be constitutionally enacted in
Kansas. Article 11, Section 1, of the Kansas Constitution
specifically authorizes the legislature to classify ``mineral
products'' for purposes of taxation. In an opinion dated
September 13, 1954, the Attorney General concluded: ``. . .
it is our opinion that a gross production or severance tax
would probably be constitutional if levied to the exclusion
of property taxes or if levied in addition to property taxes
on mineral products. We do not believe that a provision
exempting the equipment and other property used in production
would be constitutional.''
The above opinion was confirmed in another opinion, dated
June 5, 1969: ``We have studied the (1954) opinion and agree
with his conclusion stated therein. We are unable to find any
recent case which would alter that conclusion. However, we
would again emphasize that a severance tax act could not
exempt the equipment and other property used in the
production of oil and gas from ad valorem taxes.''
A 1 percent severance tax on oil gas production was enacted
on the last day of the 1957 Session. This tax was an ``in
addition to'' severance tax. During the first six months
after enactment, over $2 million was collected. This tax was
held to be invalid by the Kansas Supreme Court, however, in
the case State, ex. rel. v. Kirchner, 182 Kan. 437 (1958).
The Court held that the bill enacting the tax was
unconstitutional because the subject of the act was not
clearly expressed in its title.
OIL AND GAS SEVERANCE AND PROPERTY TAXES IN MAJOR PRODUCING AND NEIGHBORING STATES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Severance taxes (not including regulatory taxes)
-------------------------------------------------------------------------
State Severance tax 1980 property tax as estimated percentage of
Oil severance in lieu of Exemptions or Other minerals taxed value of production
tax rate property tax lower rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska....................... 12.25%......... No............. No............. Gas-10%............. NA.
California................... ............... No............. No............. .................... 3.8% (includes equipment).
Colorado..................... 2%-5%.......... No............. Yes \1\........ Gas-2%-5%; Coal-60 5.4% (percentage does not include tax on
cents per ton, equipment).
indexed to price;
oil shale-4%;
metallic minerals.
Kansas....................... ............... ............... ............... .................... 3.1% (includes equipment).
Louisiana.................... 12.5%.......... Yes............ Yes \2\........ Gas-7 cents per ................................................
m.c.f.; coal-10
cents per ton;
gravel; marble;
ores; salt; sand;
shells; stone;
sulphur; timber.
Mississippi.................. 6.0%........... Yes............ No............. Gas-6%; salt........ ................................................
Nebraska..................... 2%............. No............. No............. Gas-2%.............. NA.
New Mexico................... 3.75% plus No............. Yes \3\........ Gas-11.1 cents per 1.6% (includes equipment).
privilege tax m.c.f. (includes
of 2.55%. surtax tied to
C.P.I.) plus
privilege tax of
2.55% of value;
Coal-$.57 per ton
plus surtax tied to
C.P.I.; Uranium;
other minerals.
[[Page E1678]]
North Dakota................. 5% plus 6.5% Yes............ Yes \4\........ Gas-5%; coal-85 ................................................
oil extraction cents per ton;
tax. indexed for
inflation.
Oklahoma..................... 7.085%......... Yes............ No \5\......... Gas-7.085%; asphalt; ................................................
lead; zinc; jack;
gold; silver; or
other ores.
South Dakota................. 4.5%........... No \6\......... No............. Gas-4.5%; coal-4.5%. NA.
Texas........................ 4.6%........... No............. No............. Gas-7.5%; sulphur; 2.0% (percentage does not include tax on
cement. equipment).
Wyoming...................... 4.0%........... No............. Yes \7\........ Gas-4%; Coal-10.5%; 6.5% (percentage does not include tax on
Uranium; Trona; Oil equipment)
shale-2%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Tax on oil and gas is based on ``gross income,'' defined as market value at wellhead or the value of the severer's income as computed for Colorado
and federal income tax depletion purposes, whichever is higher.
Gross income and rate of tax:
Under $25,000: 2%;
$25,000 and under $100,000; 3%;
$100,000 and under $300,000: 4%;
$300,000 and over: 5%.
Stripper oil wells (less than 10 barrels per day) are exempt. A credit is allowed for 87.5 percent of all property taxes paid during the tax year,
excluding property taxes upon equipment and facilities.
\2\ Oil: Wells incapable of producing more than 25 barrels of oil per day which also produce at least 50 percent salt water per day, 6\1/4\ percent;
wells incapable of producing more than 10 barrels of oil per day, 3\1/8\ percent; natural gas liquids, 10 percent; gas at 15.025 pounds per square
inch pressure, 7 cents per m.c.f.; gas from oil well at 50 pounds per square inch pressure; 3 cents; gas from well incapable of producing average of
250,000 cubic feet per day, 1.3 cents. Working interest owners in an oil or gas well that discover a new field are exempt from 50 percent of all
severance taxes for the first 24-months, up to a certain amount.
\3\ A severance tax credit is allowed if a contract entered into by producer prior to 1-1-77 or a federal regulation does not allow the producer to
obtain reimbursement from the purchaser for all or part of the increased severance tax (rates were revised July 1, 1980). When computing the value of
oil for the severance tax or the value of oil and gas for the privilege tax, a deduction is allowed for royalties paid to the United States, the state
of New Mexico or any Indian or Indian tribe, as well as for the reasonable expense of trucking any product to market.
\4\ Oil: stripper oil and a limited amount of royalty interest oil is exempt from the oil extraction tax.
\5\ Former lower rates on low-producing oil or gas wells were repealed in 1980.
\6\ Mineral reserves are not subject to property tax. No personal property is taxed in South Dakota, so only oil and gas equipment forming a part of
realty is subject to the property tax.
\7\ Oil: stripper oil taxed at 2 percent rate.
Source: State Tax Guide, Commerce Clearing House, and conversations with state officials.
Table 2.--Summary of Property Taxes in States Listed in Table 1
California. Valuing oil and gas properties in California
has been reported to be the ``biggest problem under
Proposition 13.'' State uses a formula valuation procedure,
using 1975 values, plus 2 percent increase per year. Property
tax treatment of oil and gas is currently under legislative
study.
Colorado. Oil and gas assessed at 87.5 percent of the value
of production; stripper at 75 percent of value. Mill levy is
then applied to assessed value, averaging 62 mills in the
highest producing counties. Equipment is assessed at 30
percent of 1973 market value, with the use of a state
appraisal guide.
Kansas. Uses formula valuation for appraisal, assessed at
30 percent, then mill levy applied to assessed value.
Nebraska. Uses same basic appraisal technique at Kansas.
New Mexico. Has an ad valorem production and an ad valorem
equipment tax.
South Dakota. Oil and gas reserves are not taxed. No
personal property is taxed. Therefore, the property tax on
oil and gas applies only to equipment forming a part of the
realty.
Texas. Property currently appraised by each taxing unit. In
1982 appraisal will be done by one countrywide appraisal
using a standard appraisal guide. Reserves valued on formula
valuation method. Equipment valued separately as personal
property.
Wyoming. Property tax on reserves is calculated by applying
mill levy to full market value of production. Equipment above
ground is valued at 25 percent of its 1967 replacement cost;
in 1982 the base year for equipment values may be 1981
replacement cost.
[[Page E1679]]
SENATE COMMITTEE MEETINGS
Title IV of Senate Resolution 4, agreed to by the Senate on February
4, 1977, calls for establishment of a system for a computerized
schedule of all meetings and hearings of Senate committees,
subcommittees, joint committees, and committees of conference. This
title requires all such committees to notify the Office of the Senate
Daily Digest--designated by the Rules committee--of the time, place,
and purpose of the meetings, when scheduled, and any cancellations or
changes in the meetings as they occur.
As an additional procedure along with the computerization of this
information, the Office of the Senate Daily Digest will prepare this
information for printing in the Extensions of Remarks section of the
Congressional Record on Monday and Wednesday of each week.
Meetings scheduled for Thursday, July 29, 1999 may be found in the
Daily Digest of today's Record.
MEETINGS SCHEDULED
JULY 30
10 a.m.
Foreign Relations
International Operations Subcommittee
To hold hearings on United States policy toward victims
of torture.
SD-419
11:30 a.m.
Banking, Housing, and Urban Affairs
To hold hearings on the nomination of Harry J. Bowie, of
Mississippi, to be a Member of the Board of Directors
of the National Consumer Cooperative Bank; the
nomination of Armando Falcon, Jr., of Texas, to be
Director of the Office of Federal Housing Enterprise
Oversight, Department of Housing and Urban Development;
the nomination of Robert Z. Lawrence, of Massachusetts,
to be a Member of the Council of Economic Advisers; the
nomination of Martin Baily, of Maryland, to be Chairman
of the Council Economic Advisors; and the nomination of
Dorian Vanessa Weaver, of Arkansas, to be a member of
the Board of Directors of the Export-Import Bank.
SD-538
AUGUST 3
9:30 a.m.
Energy and Natural Resources
To hold hearings on S. 1052, to implement further the Act
(Public Law 94-241) approving the Covenant to Establish
a Commonwealth of the Northern Mariana Islands in
Political Union with the United States of America.
SD-366
Armed Services
To hold hearings on the nomination of Charles A.
Blanchard, of Arizona, to be General Counsel of the
Department of the Army; and the nomination of Carol
DiBattiste, of Florida, to be Under Secretary of the
Air Force.
SR-222
10 a.m.
Indian Affairs
To hold hearings on proposed legislation to provide
equitable compensation to the Cheyenne River Sioux
Tribe.
SR-485
Environment and Public Works
Business meeting to resume markup of S. 1090, to
reauthorize and amend the Comprehensive Environmental
Response, Liability, and Compensation Act of 1980.
SD-406
Governmental Affairs
Business meeting to consider pending calendar business.
SD-342
2:30 p.m.
Indian Affairs
To hold hearings on S. 692, to prohibit Internet
gambling.
SR-485
AUGUST 4
8:30 a.m.
Judiciary
To hold hearings on the nomination of David W. Ogden, of
Virginia, to be an Assistant Attorney General; and the
nomination of Robert Raben, of Florida, to be an
Assistant Attorney General.
SD-628
9:30 a.m.
Indian Affairs
To hold hearings on S. 299, to elevate the position of
Director of the Indian Health Service within the
Department of Health and Human Services to Assistant
Secretary for Indian Health; and S. 406, to amend the
Indian Health Care Improvement Act to make permanent
the demonstration program that allows for direct
billing of medicare, medicaid, and other third party
payors, and to expand the eligibility under such
program to other tribes and tribal organizations;
followed by a business meeting to consider pending
calendar business.
SR-485
10 a.m.
Judiciary
To hold hearings on S. 1172, to provide a patent term
restoration review procedure for certain drug products,
focusing on proposed remedies for relief, relating to
pipeline drugs.
SD-628
10:30 a.m.
Foreign Relations
To hold hearings on S. 693, to assist in the enhancement
of the security of Taiwan.
SD-419
Governmental Affairs
Oversight of Government Management, Restructuring and the
District of Columbia Subcommittee
To hold hearings on overlap and duplication in the
Federal Food Safety System.
SD-342
2 p.m.
Judiciary
Immigration Subcommittee
To hold hearings on annual refugee consultation.
SD-628
2:15 p.m.
Energy and Natural Resources
National Parks, Historic Preservation, and Recreation
Subcommittee
To hold oversight hearings to review the performance
management process under the requirements of the
Government Performance and Results Act, by the National
Park Service.
SD-366
Commerce, Science, and Transportation
To hold hearings to examine fraud against seniors.
SR-253
AUGUST 5
9:30 a.m.
Banking, Housing, and Urban Affairs
Housing and Transportation Subcommittee
To hold oversight hearings on activities of the Office of
Multifamily Housing Assistance Restructuring of the
Department of Housing and Urban Development.
SD-538
10 a.m.
Judiciary
Business meeting to consider pending calendar business.
SD-628
SEPTEMBER 28
9:30 a.m.
Veterans' Affairs
To hold joint hearings with the House Committee on
Veterans' Affairs to review the legislative
recommendations of the American Legion.
345 Cannon Building