Texas 2011 - 82nd Regular

Texas Senate Bill SB1505 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Uresti, Davis, Hegar S.B. No. 1505
2	2	(Lewis)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the appraisal for ad valorem tax purposes of a real
8	8	property interest in oil or gas in place.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 23.175, Tax Code, is amended to read as
11	11	follows:
12	12	Sec. 23.175. OIL OR GAS INTEREST. (a) If a real property
13	13	interest in oil or gas in place is appraised by a method that takes
14	14	into account the future income from the sale of oil or gas to be
15	15	produced from the interest, the method must use the average price of
16	16	the oil or gas from the interest for the preceding calendar year
17	17	multiplied by a price adjustment [market condition] factor as the
18	18	price at which the oil or gas produced from the interest is
19	19	projected to be sold in the current year of the appraisal. The
20	20	average price for the preceding calendar year is calculated by
21	21	dividing the sum of the monthly average prices for which oil and gas
22	22	from the interest was selling during each month of the preceding
23	23	calendar year by 12. If there was no production of oil or gas from
24	24	the interest during any month of the preceding calendar year, the
25	25	average price for which similar oil and gas from comparable
26	26	interests was selling during that month is to be used. The chief
27	27	appraiser [comptroller] shall calculate the price adjustment
28	28	[market condition] factor by dividing the price of imported
29	29	low-sulfur light crude oil in nominal dollars or the spot price of
30	30	natural gas at the Henry Hub in nominal dollars, as applicable, as
31	31	projected for the current calendar year by the United States Energy
32	32	Information Administration in the most recently published Early
33	33	Release Overview of the Annual Energy Outlook [comptroller's
34	34	current calendar year statewide average price for oil or gas, as
35	35	applicable, forecasted for revenue estimating purposes] by the
36	36	price of imported low-sulfur light crude oil in nominal dollars or
37	37	the spot price of natural gas at the Henry Hub in nominal dollars,
38	38	as applicable, for the preceding calendar year as stated in the same
39	39	report [preceding calendar year actual statewide average price for
40	40	oil or gas, as applicable. For purposes of calculating the market
41	41	condition factor, "price" means the market value of oil or gas as
42	42	determined under Subchapter C, Chapter 201, or Section 202.053, as
43	43	applicable. The comptroller shall calculate the preceding calendar
44	44	year actual statewide average prices for oil and gas and the market
45	45	condition factors for oil and gas and publish that information to be
46	46	used for ad valorem tax appraisal purposes concurrently with the
47	47	current calendar year statewide average prices for oil and gas
48	48	forecasted for revenue estimating purposes]. The price for the
49	49	interest used in the second through the sixth [or a subsequent]
50	50	calendar year of the appraisal may not reflect an annual escalation
51	51	or de-escalation rate that exceeds the average annual percentage
52	52	change from 1982 to the most recent year for which the information
53	53	is available in the producer price index for domestically produced
54	54	petroleum or for natural gas, as applicable, as published by the
55	55	Bureau of Labor Statistics of the United States Department of
56	56	Labor. The price for the interest used in the sixth calendar year
57	57	of the appraisal must be used in each subsequent year of the
58	58	appraisal [shall reflect the same percentage rate increase or
59	59	decrease in the price for oil or gas, as applicable, as projected
60	60	for that calendar year by the comptroller for revenue estimating
61	61	purposes].
62	62	(b) The comptroller by rule shall develop and distribute to
63	63	each appraisal office appraisal manuals that specify the formula to
64	64	be used in computing the limit on the price for an interest used in
65	65	the second through the sixth year of an appraisal and the methods
66	66	and procedures to discount future income from the sale of oil or gas
67	67	from the interest to present value.
68	68	(c) Each appraisal office shall use the formula, methods,
69	69	and procedures specified by the appraisal manuals developed under
70	70	Subsection (b) [of this section].
71	71	SECTION 2. This Act applies only to the appraisal for ad
72	72	valorem tax purposes of a real property interest in oil or gas in
73	73	place for a tax year beginning on or after the effective date of
74	74	this Act.
75	75	SECTION 3. This Act takes effect January 1, 2012.