LAC 61:V.1007 — Valuation of Brine Operation Wells

A. The Cost-New schedules below cover only that portion of the well subject to ad valorem taxation. Functional and/or economic obsolescence shall be considered in the analysis of fair market value as substantiated by the taxpayer in writing. Consistent with Louisiana R.S. 47:1957, the assessor may request additional documentation.
B. Instructions for Use of Table 1007.B and 1007.C and Procedure for Arriving at Assessed Value
1. Multiply the appropriate percent good factor based on age of the well as found in Table 1007.D.
2. Cost-New tables.
a. Use Table 1007.B to assess all service wells based on producing depth.
b. Use Table 1007.C to assess all operation wells based on long-string casing diameter size.
3. Recompleted Wells
a. For service wells recompleted, use new long-string casing depth to determine Cost-New amount.
b. For operation wells recompleted, use new long-string casing diameter size to determine Cost-New amount.
4. Adjustments for Allowance of Economic Obsolescence
a. All inactive (shut-in) wells shall be allowed a 90 percent reduction.
b. Deduct any additional obsolescence that has been appropriately documented by the taxpayer, as warranted, to reflect fair market value.
c. Sales, properly documented, should be considered by the assessor as fair market value, provided the sale meets all tests relative to it being a valid sale.
5. Multiply depth of well by appropriate 15 percent of Cost-New amount as indicated in Table 1007.B/Table 1007.C.
6. For Tax Year 2025, the assessed value of the wells assessed in this Chapter, on an individual property basis, is to be limited to a range of 50% to 150% of the assessed value of the same wells in the previous tax year. This limitation is inclusive of only the wells assessed in both years.
7. Brine Service Wells: All Regions—Louisiana
C. Brine Operation Wells: All Regions—Louisiana
D. Serial Number to Percent Good Conversion
*Reflects residual or floor rate.
NOTE: For any serial number categories not listed above, use year well completed to determine appropriate percent good. If spud date is later than year indicated by serial number; or, if serial number is unknown, use spud date to determine appropriate percent good.
E. Surface Equipment
1. Listed below is the cost-new of major items potentially used in the brine operation process. Any equipment not shown shall be assessed on an individual basis.
2. All surface equipment, including other property associated or used in connection with brine operations, must be rendered in accordance with guidelines established by the Tax Commission and in accordance with requirements set forth on LAT Form 10—Personal Property Tax Report—Brine Operation Property.
3. Brine operation personal property will be assessed in 7 major categories, as follows:
a. wells;
b. operation equipment (surface equipment);
c. tanks (surface equipment);
d. lines;
e. inventories (material and supplies);
f. field improvements (docks, buildings, etc.);
g. other property (not included above).
4. The cost-new values listed below are to be adjusted to allow depreciation by use of the appropriate percent good listed in Table 1007.C. When determining the value of equipment associated with a single well, use the age of that well to determine the appropriate percent good. When determining the value of equipment used on multiple wells, the average age of the wells will determine the appropriate year to be used for this purpose.
5. Functional and/or economic obsolescence shall be considered in the analysis of fair market value as substantiated by the taxpayer in writing. Consistent with Louisiana R.S. 47:1957, the assessor may request additional documentation.
6. Sales, properly documented, should be considered by the assessor as fair market value, provided the sale meets all tests relative to it being a valid sale.
7. Surface Equipment—Property Description