Bill Text: TX SB1505 | 2011-2012 | 82nd Legislature | Enrolled
Bill Title: Relating to the appraisal for ad valorem tax purposes of a real property interest in oil or gas in place.
Spectrum: Bipartisan Bill
Status: (Passed) 2011-05-27 - Effective on 1/1/12 [SB1505 Detail]
Download: Texas-2011-SB1505-Enrolled.html
S.B. No. 1505 |
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relating to the appraisal for ad valorem tax purposes of a real | ||
property interest in oil or gas in place. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 23.175, Tax Code, is amended to read as | ||
follows: | ||
Sec. 23.175. OIL OR GAS INTEREST. (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 price adjustment [ |
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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 each month of the preceding | ||
calendar year by 12. If there was no production of oil or gas from | ||
the interest 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 is to be used. The chief | ||
appraiser [ |
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low-sulfur light crude oil in nominal dollars or the spot price of | ||
natural gas at the Henry Hub in nominal dollars, as applicable, as | ||
projected for the current calendar year by the United States Energy | ||
Information Administration in the most recently published Early | ||
Release Overview of the Annual Energy Outlook [ |
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price of imported low-sulfur light crude oil in nominal dollars or | ||
the spot price of natural gas at the Henry Hub in nominal dollars, | ||
as applicable, for the preceding calendar year as stated in the same | ||
report [ |
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interest used in the second through the sixth [ |
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calendar year of the appraisal may not reflect an annual escalation | ||
or de-escalation rate that exceeds the average annual percentage | ||
change from 1982 to the most recent year for which the information | ||
is available in the producer price index for domestically produced | ||
petroleum or for natural gas, as applicable, as published by the | ||
Bureau of Labor Statistics of the United States Department of | ||
Labor. The price for the interest used in the sixth calendar year | ||
of the appraisal must be used in each subsequent year of the | ||
appraisal [ |
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(b) The comptroller by rule shall develop and distribute to | ||
each appraisal office appraisal manuals that specify the formula to | ||
be used in computing the limit on the price for an interest used in | ||
the second through the sixth year of an appraisal and the methods | ||
and procedures to discount future income from the sale of oil or gas | ||
from the interest to present value. | ||
(c) Each appraisal office shall use the formula, methods, | ||
and procedures specified by the appraisal manuals developed under | ||
Subsection (b) [ |
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SECTION 2. This Act applies only to the appraisal for ad | ||
valorem tax purposes of a real property interest in oil or gas in | ||
place for a tax year beginning on or after the effective date of | ||
this Act. | ||
SECTION 3. This Act takes effect January 1, 2012. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I hereby certify that S.B. No. 1505 passed the Senate on | ||
April 28, 2011, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
I hereby certify that S.B. No. 1505 passed the House on | ||
May 11, 2011, by the following vote: Yeas 142, Nays 0, two | ||
present not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
Approved: | ||
______________________________ | ||
Date | ||
______________________________ | ||
Governor |