Staff develops either a stratified or non-stratified weighted mean appraisal ratio from the sampled properties and divides each school district's reported category value by the weighted mean ratio to generate the division's estimate of category market value. This procedure is the same as that used to estimate value in other local property categories, with the no exception of agricultural land qualified for productivity appraisal. The minerals category consists primarily of oil and natural gas producing properties and lignite and sulfur mines. The division samples mineral properties in school districts if the minerals category represents 5 percent or more of the total school district value. Minerals categories not meeting this criteria are assigned local value.
Staff uses computer models to carry out discounted cash flow analyses of mineral properties.
Computer programs then project future cash flows, total the discounted cash flow for each year and add the discounted equipment salvage value to arrive at market values for oil and gas properties. Discounted cash flow analysis also is used to appraise lignite and sulphur properties. To produce the individual appraisal ratio for each minerals property in the sample, staff divides the appraisal district's value by the staff's estimated market value. Category G ratios are calculated similar to Category A, but Category G is divided into three subcategories. The utilities category consists of the real property and tangible personal property of telephone, electric, gas distribution, railroad and pipeline companies, as well as the property of other companies commonly thought of as utilities, such as water systems.