By: Bivins S.B. No. 734 73R2812 JD-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the appraisal of oil and gas properties for ad valorem 1-3 tax purposes. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter B, Chapter 23, Tax Code, is amended by 1-6 adding Section 23.14 to read as follows: 1-7 Sec. 23.14. OIL AND GAS MINERAL PROPERTIES. (a) The 1-8 comptroller by rule shall develop and distribute to each appraisal 1-9 office appraisal manuals that specify the methods to apply and the 1-10 procedures to use in appraising oil and gas properties. 1-11 (b) Each appraisal office shall use the methods and 1-12 procedures specified by the appraisal manuals developed under this 1-13 section in appraising oil and gas properties. 1-14 (c) Appraisal manuals developed by the comptroller under 1-15 this section shall: 1-16 (1) require that a fixed price of oil or gas be used 1-17 in making an appraisal that is equal to the average price of the 1-18 oil or gas from the property being appraised during the preceding 1-19 12 months, or from comparable properties if there has been no 1-20 production from that property during that period; 1-21 (2) require that actual costs of drilling, developing, 1-22 and operating the property incurred during the year be used in 1-23 appraising the property, or the costs of drilling, developing, and 1-24 operating comparable properties if actual costs are not available; 2-1 (3) allow a charge for indirect expenses associated 2-2 with drilling, developing, and operating the property in an amount 2-3 not to exceed 75 percent of the uniform accounting limits; and 2-4 (4) require that a fixed amount for expenses be used, 2-5 equal to actual expenses relating to the property being appraised 2-6 during the preceding 12 months, or from comparable properties if 2-7 actual expenses are not available, and treat all expenses as 2-8 constant throughout the tax year for purposes of projecting the 2-9 value of a well. 2-10 SECTION 2. This Act takes effect January 1, 1994, and 2-11 applies only to the appraisal of property for taxes imposed in 1994 2-12 and subsequent years. 2-13 SECTION 3. The importance of this legislation and the 2-14 crowded condition of the calendars in both houses create an 2-15 emergency and an imperative public necessity that the 2-16 constitutional rule requiring bills to be read on three several 2-17 days in each house be suspended, and this rule is hereby suspended.