|
|
A BILL TO BE ENTITLED
|
|
AN ACT
|
|
relating to the ad valorem tax appraisal of oil or gas interests. |
|
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 [on] each month [day] of the |
|
preceding calendar year[, excluding February 29,] by 12 [365]. If |
|
there was no production of oil or gas from the interest [on any day] |
|
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 [on that day] 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 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 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 for revenue estimating |
|
purposes. [If market conditions warrant, the average price from the
|
|
preceding year may be increased or decreased in the second and/or
|
|
succeeding years of an appraisal that takes into account the future
|
|
income from the sale of oil or gas to be produced from the interest.
|
|
If the average price from the preceding year is increased in the
|
|
second or any succeeding year of an appraisal that takes into
|
|
account the future income from the sale of oil or gas from the
|
|
interest, the annual percentage rate of increase may be no greater
|
|
than the annual percentage rate increase projected for that year by
|
|
the comptroller for revenue estimating purposes; however, in no
|
|
event may the price used in the second or any succeeding year of an
|
|
appraisal exceed 150 percent of the price used in the current year
|
|
of the appraisal. The price used in the current year may be
|
|
decreased by any amount in the second and succeeding year of an
|
|
appraisal.] |
|
SECTION 2. This Act applies only to the appraisal of |
|
property for ad valorem tax purposes for a tax year beginning on or |
|
after the effective date of this Act. |
|
SECTION 3. This Act takes effect January 1, 2008. |