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