2023 New York Laws › RPT - Real Property Tax › Article 5 - Assessment Procedure › Title 5 - Oil and Gas Economic Units › 594 - Assessment of Oil and Gas Economic Units.

§  594.  Assessment  of  oil  and  gas  economic units. 1. Oil and gas
economic units shall be assessed only in the  manner  provided  in  this
title.    Notwithstanding  the  provisions of subdivision two of section
five hundred two of this article, oil and gas economic  units  shall  be
assessed  in  the  name  of  the  producer  and  shall be described on a
separate subsection of the taxable section of  the  assessment  roll  by
such  identifying  characters as the commissioner may prescribe by rule.
For purposes of assessments under this title a producer may  certify  to
each  assessor  the address to which the assessment for an economic unit
and the notice pursuant to  subdivision  one  of  section  five  hundred
ninety-five of this title shall be sent.
2. Upon receipt of the appropriate unit of production values certified
by  the  commissioner,  each  assessor  shall  compute and determine, in
accordance with rules promulgated  by  the  commissioner,  the  assessed
value  of oil and gas economic units located in that assessing unit. Any
local officers, including school authorities, having custody and control
of the  assessment  roll  when  final  unit  of  production  values  are
certified by the commissioner, shall make the changes, if any, occurring
as  a  result of such certification. Except as otherwise provided for in
this subdivision and subdivision three of  this  section,  oil  and  gas
economic   units   shall  be  assessed  as  follows:  multiply  (1)  the
appropriate unit of production value; times (2) the amount of production
from that economic unit in the production year;  times  (3)  the  latest
state  equalization rate or special equalization rate, except that where
such rate exceeds or would exceed one hundred,  a  special  equalization
rate of one hundred percent shall be established by the commissioner for
purposes  of  this  section. The value of all elements in an oil and gas
economic unit shall be deemed to  be  included  in  the  value  of  such
economic  unit  and  shall not be separately assessed. Assessment of gas
economic units shall be  based  on  actual  measured  annual  production
during  the  life  of  the  well  or wells in that unit even though such
annual  production  may   be   non-existent   due   to   non-connection,
non-completion,  shut-in or other circumstances which prevent production
of oil and/or gas. Annual production of the economic unit shall be based
on the  production  year.    The  foregoing  notwithstanding,  upon  the
exercise  of  gas  rights,  each gas economic unit shall be subject to a
minimum assessment for two one year periods based on  a  minimum  annual
production  equivalent  of two million four hundred thousand cubic feet.
Such  minimums  shall  be  applied  during  the  life  of  the  well  in
consecutive  or  nonconsecutive  years, whenever such well has an annual
production of less than two million four hundred  thousand  cubic  feet.
Upon  completion  of  the  second  year  minimum  tax  assessment, a gas
economic unit shall be assessed on actual measured annual production  of
gas. For purposes of assessing gas economic units, no minimum assessment
shall  be applied to any gas economic unit existing on or before January
first, nineteen hundred eighty-six and  such  economic  units  shall  be
assessed  only  on actual measured annual production. Oil economic units
shall be assessed on the basis of actual measured annual production.
3. Economic units including oil and gas rights contained therein shall
not be eligible for any exemption from taxation except  as  provided  in
the following circumstances:
(a)  Oil  and gas rights and other elements of economic units shall be
exempt from  taxation  if  owned  by  a  school  district  or  board  of
cooperative educational services;
(b)  Oil  and gas rights and other elements of economic units shall be
exempt from taxation if owned  by  an  organization  whose  property  is
exempt  from  taxation pursuant to section four hundred twenty-a of this
chapter, except that such property shall be taxable to the  extent  that

the  oil  and  gas  produced  is  sold  rather  than  used by the owner,
regardless of the use to which the revenues are devoted;
(c)  Unless  a  local  law,  ordinance  or resolution has been adopted
pursuant to paragraph (a) of subdivision one  of  section  four  hundred
twenty-b  of  this  chapter,  oil  and  gas rights and other elements of
economic units shall be exempt from taxation if owned by an organization
whose property is exempt pursuant to such section four hundred twenty-b,
except that such property shall be taxable to the extent  that  the  oil
and  gas  produced  is sold rather than used by the owner, regardless of
the use to which the revenues are devoted; and
(d) Oil and gas rights and other elements of economic units  shall  be
exempt  from  taxation  if  the  gas  produced  in  the economic unit is
collected from a landfill or used to power farm waste energy systems  or
farm  waste  electric  generating  equipment, as such term is defined in
section sixty-six-j of the public  service  law.  Such  exemption  shall
apply  to  property  on  assessment  rolls based on taxable status dates
occurring on or before December thirty-first, two thousand seventeen.
4. Where an oil or gas economic unit is located within more  than  one
assessing  unit,  the  appropriate  county  director or county directors
shall certify to the assessors the percentage of capital  investment  in
property  located  within  each  such assessing unit. The assessor shall
apportion the assessment of economic units among  school  districts  and
special  districts  based  upon  the  percentage  of  capital investment
located within each such district.