Natural gas valuation. |
08LSO-0041.C1 |
FISCAL NOTE
Source of revenue increase:
Changing the method used to calculated taxable value for producer processed gas from current Proportionate Profits method to the Modified Netback method
Assumptions:
1) All of the Department of Revenue’s valuation decisions for natural gas using the proportionate profits method that are currently under appeal are upheld. There will be a dramatic impact on the above revenue if any or all of the Department of Revenue’s decisions are overturned.
2) Volumes of natural gas, as well as the makeup of the gas stream stay relatively constant.
3) Methane prices remain as forecasted by the Consensus Revenue Estimating Group (CREG) at $5.00 in calendar years 2009-2012. Taxpayers currently reporting using other statutory methods continue to report using those same methods.
4) Return on Investment (ROI) remains constant. (11.3%) Some fluctuation in the rate of return is to be expected from year to year.
Prepared by: Matthew Sachse/Craig Grenvik, DOR Phone: 777-5310/5237