By: Uresti S.B. No. 1506
A BILL TO BE ENTITLED
AN ACT
relating to the appraisal for ad valorem tax purposes of a real
property interest in oil and 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 calendar 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 the current year of the appraisal. The
average price for the preceding calendar 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
calendar year by 12. If there was no production of oil or gas from
the interest during any month of the preceding calendar 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 using actual price data, as
available, and market-based data and a market-based methodology
[for revenue estimating purposes] by the preceding calendar year
actual statewide average price for oil or gas, as applicable. For
purposes of 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 calendar 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 using actual
price data, as available, and market-based data and a market-based
methodology [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 using actual price data,
as available, and market-based data and a market-based methodology
[for revenue estimating purposes].
SECTION 2. This Act applies only to the appraisal of a real
property interest in oil or gas in place for a tax year beginning on
or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2012.