The Comptroller of Public Accounts proposes an amendment to §9.4031, concerning the manual for discounting oil and gas income. This section is being amended to implement Senate Bill 1505, 82nd Legislature, 2011, effective January 1, 2012, which changes the method to be used in the appraisal of oil and gas in place that 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 section is also being amended to separately identify the appendices and to delete the list of references.

John Heleman, Chief Revenue Estimator, has determined that for the first five-year period the rule will be in effect, there will be no significant revenue impact on the state or units of local government.

Mr. Heleman also has determined that for each year of the first five years the rule is in effect, the public benefit anticipated as a result of enforcing the rule will be by improving the administration of property taxation and the appraisal of properties with oil and natural gas interest. The proposed amendment would have no fiscal impact on small businesses. There is no significant anticipated economic cost to individuals who are required to comply with the proposed rule.

Comments on the amendment may be submitted to Deborah Cartwright, Director, Property Tax Assistance Division, P.O. Box 13528, Austin, Texas 78711-3528. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register.

The amendment is proposed under Senate Bill 1505's amendment to Tax Code, §23.175 which requires the comptroller by rule to 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.

The amendment implements Tax Code, §23.175(b).