§ 39-7-109 — Valuation of severed nonproducing oil or gas mineral interests

Colorado § 39-7-109

• Jurisdiction: Colorado
• Title 39: Taxation
• Art.: Valuation of Oil and Gas

Text

(1) The actual value of severed nonproducing oil or gas or oil and gas mineral
interests shall be determined by the income approach capitalizing the annual net
rental income for such nonproducing mineral interests at an appropriate market
rate. If such severed mineral interests are unleased, the assessor shall use the
average per acre annual rental of all such mineral interests under lease in the
county or in the area to determine the actual value thereof.

(2) For the purposes of this section, annual rental means annual rental
payments, or other compensatory payments payable for the right to hold a mineral
interest, which payments are fixed and certain in amount and payable periodically
over a fixed period calculated on a twelve-month basis. Annual rental shall be the
representative annual rental for such mineral interests leased within the county or
the area, and annual rental does not include royalty payments, advanced royalty
payments, bonus payments, or minimum royalty payments covering periods when
the mineral interests are not in production, even though said payments may be
fixed and certain in amount and payable periodically. For the purposes of this
subsection (2), royalty payments, advanced royalty payments, and minimum
royalty payments are payments attributable to a portion of the current or future
mineral production of a mineral interest, paid for the privilege of producing
minerals, and bonus payments means compensation paid as consideration for the
granting of a mineral lease or other compensatory payments which are payable
regardless of the extent of use of the mineral interest and which are fixed and
certain in amount and may be payable in one or more periodical increments over a
fixed period.

Legislative History

Source: L. 85: Entire section added, p. 1213, � 10, effective May 9.