82R3055 SMH-F
By: Uresti S.B. No. 1505
A BILL TO BE ENTITLED
AN ACT
relating to the appraisal for ad valorem tax purposes of a real
property interest in oil or gas in place.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 23.175(a), Tax Code, is amended to read
as follows:
(a) If a real property interest in oil or gas in place is
appraised by a method that takes into account the future income from
the sale of oil or gas to be produced from the interest, the method
must use the average price of the oil or gas from the interest for
the preceding two calendar years [year multiplied by a market
condition factor] as the price at which the oil or gas produced from
the interest is projected to be sold in each calendar [the current]
year of the appraisal. The average price for the preceding two
calendar years [year] is calculated by dividing the sum of the
monthly average prices for which oil and gas from the interest was
selling during each month of the preceding two calendar years
[year] by 24 [12]. If there was no production of oil or gas from
the interest during any month of the preceding two calendar years
[year], the average price for which similar oil and gas from
comparable interests was selling during that month is to be
used. [The comptroller shall calculate the market condition
factor by dividing the comptroller's current calendar year
statewide average price for oil or gas, as applicable, forecasted
for revenue estimating purposes by the preceding calendar year
actual statewide average price for oil or gas, as applicable.] For
purposes of this section [calculating the market condition factor],
"price" means the market value of oil or gas as determined under
Subchapter C, Chapter 201, or Section 202.053, as applicable. The
comptroller shall calculate the preceding two calendar years [year]
actual statewide average prices for oil and gas [and the market
condition factors for oil and gas] and publish that information to
be used for ad valorem tax appraisal purposes [concurrently with
the current calendar year statewide average prices for oil and gas
forecasted for revenue estimating purposes. The price for the
interest used in the second or a subsequent calendar year of the
appraisal shall reflect the same percentage rate increase or
decrease in the price for oil or gas, as applicable, as projected
for that calendar year by the comptroller for revenue estimating
purposes].
SECTION 2. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2012.