1-1 By: Craddick (Senate Sponsor - Bivins) H.B. No. 925
1-2 (In the Senate - Received from the House April 19, 1993;
1-3 April 19, 1993, read first time and referred to Committee on
1-4 Finance; May 19, 1993, reported favorably by the following vote:
1-5 Yeas 12, Nays 0; May 19, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Montford x
1-9 Turner x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Ellis x
1-14 Haley x
1-15 Moncrief x
1-16 Parker x
1-17 Ratliff x
1-18 Sims x
1-19 Truan x
1-20 Zaffirini x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the appraisal of oil and gas property for ad valorem
1-24 tax purposes.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Subchapter B, Chapter 23, Tax Code, is amended by
1-27 adding Section 23.175 to read as follows:
1-28 Sec. 23.175. OIL OR GAS INTEREST. (a) If a real property
1-29 interest in oil or gas in place is appraised by a method that takes
1-30 into account the future income from the sale of oil or gas to be
1-31 produced from the interest, the method must use the average price
1-32 of the oil or gas from the interest for the preceding year as the
1-33 price at which the oil or gas produced from the interest is
1-34 projected to be sold in the current year of the appraisal. The
1-35 average price for the preceding year is calculated by dividing the
1-36 sum of the prices for which oil and gas from the interest was
1-37 selling on each day of the preceding calendar year, excluding
1-38 February 29, by 365. If there was no production of oil or gas from
1-39 the interest on any day during the preceding calendar year, the
1-40 average price for which similar oil and gas from comparable
1-41 interests was selling on that day is to be used. If market
1-42 conditions warrant, the average price from the preceding year may
1-43 be increased or decreased in the second and/or succeeding years of
1-44 an appraisal that takes into account the future income from the
1-45 sale of oil or gas to be produced from the interest. If the
1-46 average price from the preceding year is increased in the second or
1-47 any succeeding year of an appraisal that takes into account the
1-48 future income from the sale of oil or gas from the interest, the
1-49 annual percentage rate of increase may be no greater than the
1-50 annual percentage rate increase projected for that year by the
1-51 comptroller for revenue estimating purposes; however, in no event
1-52 may the price used in the second or any succeeding year of an
1-53 appraisal exceed 150 percent of the price used in the current year
1-54 of the appraisal. The price used in the current year may be
1-55 decreased by any amount in the second and succeeding year of an
1-56 appraisal.
1-57 (b) The comptroller by rule shall develop and distribute to
1-58 each appraisal office appraisal manuals that specify methods and
1-59 procedures to discount future income from the sale of oil or gas
1-60 from the interest to present value.
1-61 (c) Each appraisal office shall use the methods and
1-62 procedures specified by the appraisal manuals developed under
1-63 Subsection (b) of this section.
1-64 SECTION 2. This Act takes effect September 1, 1993.
1-65 SECTION 3. The importance of this legislation and the
1-66 crowded condition of the calendars in both houses create an
1-67 emergency and an imperative public necessity that the
1-68 constitutional rule requiring bills to be read on three several
2-1 days in each house be suspended, and this rule is hereby suspended.
2-2 * * * * *
2-3 Austin,
2-4 Texas
2-5 May 19, 1993
2-6 Hon. Bob Bullock
2-7 President of the Senate
2-8 Sir:
2-9 We, your Committee on Finance to which was referred H.B. No. 925,
2-10 have had the same under consideration, and I am instructed to
2-11 report it back to the Senate with the recommendation that it do
2-12 pass and be printed.
2-13 Montford,
2-14 Chairman
2-15 * * * * *
2-16 WITNESSES
2-17 No witnesses appeared on H. B. No. 925.