Brief (1)
HB 2823, as amended, would clarify legislative intent with respect to the methodology utilized to determine the valuation of producing oil and gas leases for property tax purposes. Specifically, the "primary and predominant" consideration in such determination of value would be deemed-retroactively to have been and prospectively to be-the "actual value of oil and gas production severed from the earth."
Background
Proponents of the bill said that a 1996 ruling by the District of Columbia Circuit Court required refunds retroactive to October of 1983 of property taxes "passed through" by Kansas producers to pipelines and, ultimately, consumers. They said that the Legislature had always believed that the property tax on oil and gas had been a production-based tax, and that enactment of this bill would reinforce that notion.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html