Nebraska Administrative Code › Topic - REVENUE, DEPARTMENT OF › Title 350 - Nebraska Department of Revenue, Property Assessment Division › Chapter 13 - Mineral Interests Regulations › Section 350-13-002 - ASSESSMENT

Current through June 17, 2024
002.01 Mineral interests, either producing or
				non-producing, are real property and shall be valued for taxation as any other
				real property whether or not such mineral interests are severed from the
				surface interests. For more information, see Real Property Regulations, Chapter
				10.
002.02 Any owner of land from
				which a mineral interest has been severed or the owner of a mineral interest
				which has been severed may file an application with the assessor of the county
				where such land is located to separate for purposes of assessment and taxes
				such severed mineral interest from the surface interest and place them
				separately on the assessment and tax roll of the county. When proof of
				ownership of the severed mineral interest is not made available to the
				assessor, the mineral interest shall be assessed to the owner of the surface
				interest. The applicant shall, at his or her own cost, provide to the assessor
				proof of ownership of the severed mineral interest and a record of the creation
				of the severed mineral interest, as shown by the records of the county clerk or
				register of deeds. Proof of ownership, the name and last known address of the
				owner or owners, the ownership interest including any fractional interest,
				legal description, and the record of creation of the severed mineral interests
				shall be provided in the form of an opinion by an attorney or a certificate
				prepared by a licensed abstracter.
002.03 The application requesting separate
				assessment listings of a severed mineral interest and surface interest must be
				filed with the assessor on or before January 1 of the year in which the
				interests are to be separately listed and assessed. The mineral interest will
				continue to be separately assessed without a new application regardless of any
				change of ownership of either the surface interest or the mineral interest. If
				after separate assessment the owner of the surface becomes the owner of the
				mineral interest, so that all interests in the surface and the mineral interest
				are the same, the owner of the surface may request in writing, along with proof
				of recorded ownership, that the separate assessment cease. Upon receipt of the
				request and proof of recorded ownership, the assessor shall combine the values
				of the surface and mineral interest.
002.04 The assessor shall determine the
				actual value of all mineral interests, whether producing or non-producing, in
				the county by use of the applicable factors listed in Neb. Rev. Stat. Section
				77-112. The
				three standard approaches to value are cost, income, and sales comparison. The
				summed total value of the mineral interest and any value established for the
				surface interest only, shall not exceed the value of the fee simple interest
				for the parcel of land as may be compared to properties with similar uses,
				geographical characteristics and/or geological potentials.
002.05 All items of real property, such as
				wells, buildings, fixtures, except trade fixtures, improvements, or mobile
				homes, that are used for the production of minerals and owned by parties other
				than the owners of the mineral and/or surface interests are real property and
				shall be assessed as improvements on leased lands.
002.06 All taxable tangible personal property
				held or owned on January 1, which may include pipe, submersible pumps, sucker
				rods, fittings and any other equipment, trade fixtures, tools and items used
				for the production of minerals, shall be reported to the assessor where such
				property is located.
002.07 In the
				valuation of parcels of real property containing mineral deposits the assessor
				shall consider the likelihood of the mineral to be extracted or to begin
				extraction within a several year time frame. The assessor shall consider
				whether the present value of a mineral that will be extracted diminishes in
				value the more remote the extraction is likely to be in terms of time or
				certainty of occurrence.
002.07A If an income
				approach is used to value a mineral interest, it requires an estimate of the
				amount of mineral in place, an estimate of the time of commencement and period
				of extraction, a net dollar value per unit of the extracted mineral, a
				determination of continuity of production and the selection of an appropriate
				capitalization rate. The selection of the capitalization rate shall be based on
				market factors, including capital costs and risks based on the certainty of the
				existence or quality of minerals or the commencement and continuity of an
				extraction operation. The determination of the dollar value per unit of mineral
				should be based upon the prevailing local lease/royalty rate per ton (or other
				appropriate measure) for similar mineral, and the existence of considerations
				of abnormal expenses of extraction such as depth of overburden or restoration
				of the property.
002.07B The
				valuation of mineral interests shall be evaluated each year as part of the
				valuation process by the assessor for changes in the underlying assumptions
				contained in the present value calculation, such as the ongoing nature of the
				extraction operation, the likelihood of near term extraction of minerals, or a
				change in the quality and rate of extraction.
002.07C The net present value of the
				potential cash flow will be calculated based on the summation of the estimate
				of the individual cash flows discounted for time of production and time until
				commencement of extraction.
002.07D
				In those occurrences where extraction is so remote in time or probability of
				being extracted as to have little present value, the mineral interest shall
				have little or no measurable contributory value and is considered included in
				the total value of the fee interest assessed. The parcel's value shall be
				comparable to other parcels with similar uses, geographical characteristics,
				and geological potentials.