Administrative Rules of the State of Montana

(1) Bids for new rigs will be solicited from manufacturers of oil drilling rigs to determine current replacement costs based on the depth rating listed below. For each depth rating listed below for oil drilling rigs, there will be two replacement cost categories. One category will represent current replacement cost of a mechanical rig and the second category will represent current replacement cost of an electric rig. Each rig as it is assessed will be placed in a value category based on its depth.

DEPTH CATEGORIES


Class		Depth Capacity

1	. . . . . . . . . . . . . . . . . . . . . . . . . .	0 to 3,000 ft.
2	. . . . . . . . . . . . . . . . . . . . . . . . . .	3,001 ft. to 5,000 ft.
3	. . . . . . . . . . . . . . . . . . . . . . . . . .	5,001 ft. to 8,000 ft.
4	. . . . . . . . . . . . . . . . . . . . . . . . . .	8,001 ft. to 10,000 ft.
5	. . . . . . . . . . . . . . . . . . . . . . . . . .	10,001 ft. to 12,500 ft.
6	. . . . . . . . . . . . . . . . . . . . . . . . . .	12,501 ft. to 15,000 ft.
7	. . . . . . . . . . . . . . . . . . . . . . . . . .	15,001 ft. to 20,000 ft.
8	. . . . . . . . . . . . . . . . . . . . . . . . . .	20,001 ft. and over

MANUFACTURER'S	ELECTRICAL	MECHANICAL
DEPTH RATING	RIG R.C.N	RIG R.C.N
0 - 3,000 ft.		$ 285,209
3,001 ft. - 5,000 ft.		432,135
5,001 ft. - 7,500 ft.	$ 868,250	654,750
7,501 ft. - 10,000 ft.	1,167,210	998,750
10,001 ft. - 12,500 ft.	1,265,500	1,130,600
12,501 ft. - 15,000 ft.	1,720,400	1,538,500
15,001 ft. - 20,000 ft.	1,990,100
20,001 ft. and over	2,036,047

The depth capacity for drilling rigs will be based on the "Manufacturers Depth Rating." These replacement costs will then be depreciated to arrive at market value according to the schedule provided in (2).

(2) The department shall prepare a ten-year trended depreciation schedule for oil drilling rigs. The trended depreciation schedule shall be derived from depreciation factors published in the Marshall & Swift Valuation Service Guide. The "% good" for all drill rigs less than one year old shall be 100 percent. The trended depreciation schedule for tax year 2017 is listed below.

YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2017	100%	1.000	100%
2016	92%	1.000	92%
2015	84%	0.988	83%
2014	76%	0.996	76%
2013	67%	1.008	68%
2012	58%	1.009	59%
2011	49%	1.037	51%
2010	39%	1.065	42%
2009	30%	1.050	31%
2008	24%	1.087	26%
2007 and older	21%	1.136	24%

(3) In any year that the information required in (1) is not available for use by the department, oil drilling rigs shall be valued by using the previous year's schedule.

(4) This rule is effective for tax years beginning after December 31, 2016.

History: 15-1-201, MCA; IMP, 15-6-135, 15-6-138, 15-6-219, MCA; NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3653, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2011 MAR p. 345, Eff. 3/11/11; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17.