By Craddick                                           H.B. No. 2612
       74R6944 JD-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the appraisal of interests in oil and gas properties
    1-3  for ad valorem 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 23.176 to read as follows:
    1-7        Sec. 23.176.  DETERMINATION OF DISCOUNT RATE FOR OIL OR GAS
    1-8  INTEREST.  (a)  The comptroller shall conduct an annual study using
    1-9  information from persons engaged in the business of producing oil
   1-10  or gas from minerals in place in this state of the cost of capital
   1-11  to those persons.  Not later than February 1, the comptroller shall
   1-12  publish a capitalization rate for use in determining the taxable
   1-13  value of a real property interest in oil or gas in place for the
   1-14  current tax year.
   1-15        (b)  If a real property interest in oil or gas in place is
   1-16  appraised by a method that takes into account the future income
   1-17  from the sale of oil or gas to be produced from the interest, the
   1-18  property shall be appraised by using a discount rate that may not
   1-19  exceed the rate determined under Subsection (a) adjusted by a risk
   1-20  factor that takes into account the class of oil or gas reserves on
   1-21  the property and the risks associated with the production of that
   1-22  class.
   1-23        SECTION 2.  The importance of this legislation and the
   1-24  crowded condition of the calendars in both houses create an
    2-1  emergency and an imperative public necessity that the
    2-2  constitutional rule requiring bills to be read on three several
    2-3  days in each house be suspended, and this rule is hereby suspended.