Section 594. Assessment of oil and gas economic units

1. Oil and gas
  economic units shall be assessed only in the  manner  provided  in  this
  title.    Notwithstanding  the  provisions of subdivision two of section
  five hundred two of this article, oil and gas economic  units  shall  be
  assessed  in  the  name  of  the  producer  and  shall be described on a
  separate subsection of the taxable section of  the  assessment  roll  by
  such  identifying  characters  as the state board may prescribe by rule.
  For purposes of assessments under this title a producer may  certify  to
  each  assessor  the address to which the assessment for an economic unit
  and the notice pursuant to  subdivision  one  of  section  five  hundred
  ninety-five of this title shall be sent.
    2. Upon receipt of the appropriate unit of production values certified
  by  the  state  board,  each  assessor  shall  compute and determine, in
  accordance with rules promulgated by the state board, the assessed value
  of oil and gas economic units located in that assessing unit. Any  local
  officers,  including  school  authorities, having custody and control of
  the assessment roll when final unit of production values  are  certified
  by  the  state  board,  shall  make  the changes, if any, occurring as a
  result of such certification. Except as otherwise provided for  in  this
  subdivision  and subdivision three of this section, oil and gas economic
  units shall be assessed as follows: multiply (1) the appropriate unit of
  production value; times (2) the amount of production from that  economic
  unit  in  the  production  year; times (3) the latest state equalization
  rate or special equalization rate, except that where such  rate  exceeds
  or  would exceed one hundred, a special equalization rate of one hundred
  percent shall be established by the state board  for  purposes  of  this
  section. The value of all elements in an oil and gas economic unit shall
  be  deemed  to  be included in the value of such economic unit and shall
  not be separately assessed. Assessment of gas economic  units  shall  be
  based  on  actual measured annual production during the life of the well
  or wells in  that  unit  even  though  such  annual  production  may  be
  non-existent  due  to  non-connection,  non-completion, shut-in or other
  circumstances  which  prevent  production  of  oil  and/or  gas.  Annual
  production  of  the economic unit shall be based on the production year.
  The foregoing notwithstanding, upon the exercise of gas rights, each gas
  economic unit shall be subject to a minimum assessment for two one  year
  periods  based  on a minimum annual production equivalent of two million
  four hundred thousand cubic feet. Such minimums shall be applied  during
  the  life  of  the well in consecutive or nonconsecutive years, whenever
  such well has an annual production of less than two million four hundred
  thousand cubic feet. Upon completion of  the  second  year  minimum  tax
  assessment,  a  gas  economic  unit shall be assessed on actual measured
  annual production of gas. For purposes of assessing gas economic  units,
  no minimum assessment shall be applied to any gas economic unit existing
  on  or  before  January  first,  nineteen  hundred  eighty-six  and such
  economic  units  shall  be  assessed  only  on  actual  measured  annual
  production.  Oil economic units shall be assessed on the basis of actual
  measured annual production.
    3. Economic units including oil and gas rights contained therein shall
  not be eligible for any exemption from taxation except  as  provided  in
  the following circumstances:
    (a)  Oil  and gas rights and other elements of economic units shall be
  exempt from  taxation  if  owned  by  a  school  district  or  board  of
  cooperative educational services;
    (b)  Oil  and gas rights and other elements of economic units shall be
  exempt from taxation if owned  by  an  organization  whose  property  is
  exempt  from  taxation pursuant to section four hundred twenty-a of this
  chapter, except that such property shall be taxable to the  extent  that

  the  oil  and  gas  produced  is  sold  rather  than  used by the owner,
  regardless of the use to which the revenues are devoted;
    (c)  Unless  a  local  law,  ordinance  or resolution has been adopted
  pursuant to paragraph (a) of subdivision one  of  section  four  hundred
  twenty-b  of  this  chapter,  oil  and  gas rights and other elements of
  economic units shall be exempt from taxation if owned by an organization
  whose property is exempt pursuant to such section four hundred twenty-b,
  except that such property shall be taxable to the extent  that  the  oil
  and  gas  produced  is sold rather than used by the owner, regardless of
  the use to which the revenues are devoted; and
    (d) Oil and gas rights and other elements of economic units  shall  be
  exempt  from  taxation  if  the  gas  produced  in  the economic unit is
  collected from a landfill or used to power farm waste energy systems  or
  farm  waste  electric  generating  equipment, as such term is defined in
  section sixty-six-j of the public  service  law.  Such  exemption  shall
  apply  to  property  on  assessment  rolls based on taxable status dates
  occurring on or before December thirty-first, two thousand seventeen.
    4. Where an oil or gas economic unit is located within more  than  one
  assessing  unit,  the  appropriate  county  director or county directors
  shall certify to the assessors the percentage of capital  investment  in
  property  located  within  each  such assessing unit. The assessor shall
  apportion the assessment of economic units among  school  districts  and
  special  districts  based  upon  the  percentage  of  capital investment
  located within each such district.