HB 3198

85(R) - 2017
House Ways & Means
Senate Finance
House Ways & Means
Senate Finance
Oil & Gas

Companion Bill

SB 1514

Vote Recommendation

  • Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral


Drew Darby


Craig Estes

Bill Caption

Relating to the eligibility of land to continue to be appraised for ad valorem tax purposes as qualified open-space land if the land begins to be used for oil and gas operations.

Fiscal Notes

The bill's provision that would continue special open-space appraisal on land on which oil and gas operations have commenced would create a cost to the state through the school finance formulas because land under an oil or gas operation that would otherwise be taxable at its market value would continue to receive a significantly lower special appraised value and would avoid the five year rollback provision that would require the payment of additional taxes.

Bill Analysis

Under current law, qualifying land is given a tax break under open-space land appraisals. In recent times, some appraisal districts have begun disqualifying land (and triggering back taxes) for land that is used for oil and gas operations -- sometimes operations that the landowner does not control or benefit from.

HB 3198 would clarify that this favorable tax treatment continues if oil and gas operations over which the Railroad Commission has jurisdiction are conducted and the land continues to otherwise qualify for open-space land appraisal.

Vote Recommendation Notes

While we otherwise oppose the market distortions caused by open-space land appraisals, given the procedural nature of this bill in clarifying existing law to continue consistent application, we remain neutral on HB 3198.

Organizations Supporting

Permian Basin Petroleum Association
Texas Alliance of Energy Producers
Texas Farm Bureau
Texas Independent Producers and Royalty Owners Association
Texas Land and Mineral Owners Association
Texas Wildlife Association