This bill amends the method of valuation for mineral rights under the Arkansas Constitution, specifically Article 16, Section 5, and clarifies the valuation process for oil and gas well production equipment. The legislative intent is to provide a remedial and clarifying framework for the assessment of mineral rights and production equipment, ensuring consistency and uniformity in valuation practices. Key changes include the definition of "well" to encompass various types of hydrocarbons, the assessment of production equipment as real property, and the establishment of specific valuation methods for both mineral interests and production equipment.

Additionally, the bill specifies that the county assessor must assess mineral interests separately from the fee simple interest in the land when applicable, and it outlines the conditions under which a sale of mineral interests or land for nonpayment of taxes will not affect the title to the other. The assessment of production equipment is set at a value of one dollar per foot, with exceptions for inoperable portions. The bill also introduces a uniform expense allowance for assessing working interest values and mandates that all valuation guidance provided to county assessors comply with the new requirements. The changes will take effect for assessment years beginning on or after January 1, 2025.

Statutes affected:
Old version HB1937 V2 - 4-3-2025 11:08 AM: 26-26-1110(a)
Old version HB1937 Original - 3-31-2025 04:31 PM: 26-26-1110(a)
HB 1937: 26-26-1110(a)
Act 821: 26-26-1110(a)