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.