Bill Text: TX SB1985 | 2015-2016 | 84th Legislature | Enrolled

Texas Senate Bill 1985 (Prior Session Legislation)

TX State Legislature page for SB1985

Bill Title: Relating to the appraisal for ad valorem tax purposes of a real property interest in oil or gas in place.

Sponsorship: Bipartisan Bill

Status: (Passed) 2015-05-05 - Effective on 1/1/16 [SB1985 Detail]

Download: Texas-2015-SB1985-Enrolled.html



	S.B. No. 1985




	AN ACT
	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(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 price adjustment 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 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. Except as
	otherwise provided by this subsection, the [~~The~~] chief appraiser
	shall calculate the price adjustment factor by dividing the spot
	price of West Texas Intermediate [~~imported low-sulfur light~~] crude
	oil in nominal dollars per barrel or the spot price of natural gas
	at the Henry Hub in nominal dollars per million British thermal
	units, as applicable, as projected for the current calendar year by
	the United States Energy Information Administration in the most
	recently published edition [~~Early Release Overview~~] of the Annual
	Energy Outlook by the spot price of West Texas Intermediate
	[~~imported low-sulfur light~~] crude oil in nominal dollars per barrel
	or the spot price of natural gas at the Henry Hub in nominal dollars
	per million British thermal units, as applicable, for the preceding
	calendar year as stated in the same report. If as of March 1 of the
	current calendar year the most recently published edition of the
	Annual Energy Outlook was published before December 1 of the
	preceding calendar year, the chief appraiser shall use the
	projected current and preceding calendar year spot price of West
	Texas Intermediate crude oil in nominal dollars per barrel or the
	spot price of natural gas at the Henry Hub in nominal dollars per
	million British thermal units, as applicable, as stated in the
	Short-Term Energy Outlook report published in January of the
	current calendar year by the United States Energy Information
	Administration in the price adjustment factor calculations. The
	price for the interest used in the second through the sixth 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.
	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, 2016.





	______________________________	______________________________
	President of the Senate	Speaker of the House

	I hereby certify that S.B. No. 1985 passed the Senate on
	April 14, 2015, by the following vote: Yeas 31, Nays 0.


	______________________________
	Secretary of the Senate

	I hereby certify that S.B. No. 1985 passed the House on
	April 23, 2015, by the following vote: Yeas 137, Nays 2, two
	present not voting.


	______________________________
	Chief Clerk of the House



	Approved:

	______________________________
	Date


	______________________________
	Governor