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A BILL TO BE ENTITLED
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AN ACT
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relating to the appraisal for ad valorem tax purposes of a real |
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property interest in oil and gas in place. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.175(a), Tax Code, is amended to read |
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as follows: |
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(a) If a real property interest in oil or gas in place is |
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appraised by a method that takes into account the future income from |
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the sale of oil or gas to be produced from the interest, the method |
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must use the average price of the oil or gas from the interest for |
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the preceding calendar year multiplied by a market condition factor |
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as the price at which the oil or gas produced from the interest is |
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projected to be sold in the current year of the appraisal. The |
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average price for the preceding calendar year is calculated by |
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dividing the sum of the monthly average prices for which oil and gas |
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from the interest was selling during each month of the preceding |
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calendar year by 12. If there was no production of oil or gas from |
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the interest during any month of the preceding calendar year, the |
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average price for which similar oil and gas from comparable |
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interests was selling during that month is to be used. The |
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comptroller shall calculate the market condition factor by dividing |
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the comptroller's current calendar year statewide average price for |
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oil or gas, as applicable, forecasted using actual price data, as |
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available, and market-based data and a market-based methodology |
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[for revenue estimating purposes] by the preceding calendar year |
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actual statewide average price for oil or gas, as applicable. For |
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purposes of calculating the market condition factor, "price" means |
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the market value of oil or gas as determined under Subchapter C, |
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Chapter 201, or Section 202.053, as applicable. The comptroller |
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shall calculate the preceding calendar year actual statewide |
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average prices for oil and gas and the market condition factors for |
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oil and gas and publish that information to be used for ad valorem |
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tax appraisal purposes concurrently with the current calendar year |
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statewide average prices for oil and gas forecasted using actual |
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price data, as available, and market-based data and a market-based |
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methodology [for revenue estimating purposes]. The price for the |
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interest used in the second or a subsequent calendar year of the |
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appraisal shall reflect the same percentage rate increase or |
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decrease in the price for oil or gas, as applicable, as projected |
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for that calendar year by the comptroller using actual price data, |
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as available, and market-based data and a market-based methodology |
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[for revenue estimating purposes]. |
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SECTION 2. This Act applies only to the appraisal of a real |
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property interest in oil or gas in place for a tax year beginning on |
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or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2012. |