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Senate Bill 1505 |
Senate Author: Uresti et al. |
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Effective: 1-1-12 |
House Sponsor: Lewis |
Under previous law, if a real property interest in oil or gas in place was to be appraised by a method that took into account the future income from the sale of oil or gas to be produced from the interest, the method had to 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 was projected to be sold in the current year of the appraisal. The law also required the comptroller of public accounts to calculate the market condition factor in the manner specified, calculate the preceding calendar year actual statewide average prices for oil and gas, and publish that information for appraisal purposes. Senate Bill 1505 amends the Tax Code to change the multiplier used in that appraisal method from a market condition factor as calculated by the comptroller to a price adjustment factor as calculated by the chief appraiser.
Senate Bill 1505 specifies the manner in which the price adjustment factor is to be calculated, places restrictions on the price for the interest used in the second through the sixth calendar year of appraisal, and requires the comptroller by rule to develop and distribute to each appraisal office 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, in addition to specifying the methods and procedures to discount future income from the sale of oil and gas from the interest to present value.