Texas Statutes
Subchapter B. Special Appraisal Provisions
Section 23.175. Oil or Gas Interest

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 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 chief appraiser shall calculate the price adjustment factor by dividing the 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 projected for the current calendar year by the United States Energy Information Administration in the most recently published edition of the Annual Energy Outlook by the 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, 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.
(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).
Added by Acts 1993, 73rd Leg., ch. 998, Sec. 1, eff. Sept. 1, 1993.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 911 (H.B. 2982), Sec. 2, eff. January 1, 2008.
Acts 2011, 82nd Leg., R.S., Ch. 144 (S.B. 1505), Sec. 1, eff. January 1, 2012.
Acts 2015, 84th Leg., R.S., Ch. 4 (S.B. 1985), Sec. 1, eff. January 1, 2016.

Structure Texas Statutes

Texas Statutes

Tax Code

Title 1 - Property Tax Code

Subtitle D - Appraisal and Assessment

Chapter 23 - Appraisal Methods and Procedures

Subchapter B. Special Appraisal Provisions

Section 23.11. Governmental Action That Constitutes Taking

Section 23.12. Inventory

Section 23.121. Dealer's Motor Vehicle Inventory; Value

Section 23.1211. Temporary Production Aircraft; Value

Section 23.122. Prepayment of Taxes by Certain Taxpayers

Section 23.123. Declarations and Statements Confidential

Section 23.124. Dealer's Vessel and Outboard Motor Inventory; Value

Section 23.1241. Dealer's Heavy Equipment Inventory; Value

Section 23.1242. Prepayment of Taxes by Heavy Equipment Dealers

Section 23.1243. Refund of Prepayment of Taxes on Fleet Transaction

Section 23.125. Prepayment of Taxes by Certain Taxpayers

Section 23.126. Declarations and Statements Confidential

Section 23.127. Retail Manufactured Housing Inventory; Value

Section 23.128. Prepayment of Taxes by Manufactured Housing Retailers

Section 23.129. Waiver of Certain Penalties

Section 23.13. Taxable Leaseholds

Section 23.135. License to Occupy Dwelling Unit in Tax-Exempt Retirement Community

Section 23.14. Appraisal of Property Subject to Environmental Response Requirement

Section 23.15. Intangibles of an Insurance Company

Section 23.16. Intangibles of a Savings and Loan Association

Section 23.17. Mineral Interest Not Being Produced

Section 23.175. Oil or Gas Interest

Section 23.18. Property Owned by a Nonprofit Homeowners' Organization for the Benefit of Its Members

Section 23.19. Property Occupied by Stockholders of Corporation Incorporated Under Cooperative Association Act

Section 23.20. Waiver of Special Appraisal

Section 23.21. Property Used to Provide Affordable Housing

Section 23.215. Appraisal of Certain Nonexempt Property Used for Low-Income or Moderate-Income Housing

Section 23.22. Land Use of Which Is Restricted by Governmental Entity

Section 23.23. Limitation on Appraised Value of Residence Homestead

Section 23.24. Furniture, Fixtures, and Equipment

Section 23.25. Appraisal of Land Used for Single-Family Residential Purposes That Is Contiguous to Agricultural or Open-Space Land With Common Ownership

Section 23.26. Solar Energy Property