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SENATE FLOOR VERSION
April 6, 2021
ENGROSSED HOUSE
BILL NO. 2775 By: Pfeiffer of the House
and
Montgomery of the Senate
An Act relating to revenue and taxation; amending 68
O.S. 2011, Sections 2802, as amended by Sect ion 1,
Chapter 266, O.S.L. 2018 and 2875, as amended by
Section 1, Chapter 142, O.S.L. 2015 (68 O.S. Supp.
2020, Sections 2802 and 2875), which relate to the Ad
Valorem Tax Code; modifying definition; modifying
provisions related to valuation of personal property;
modifying duties of the Ad Valorem Division of th e
Oklahoma Tax Commission; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2011, Section 2802, as
amended by Section 1, Chapter 266, O.S.L. 2018 (68 O.S. Sup p. 2020,
Section 2802), is amended to read as follows:
Section 2802. As used in Section 2801 et seq. of this title:
1. "Accepted standards for mass appraisal practice" means those
standards for the collect ion and analysis of information about
taxable properties within a taxing jurisdiction permitting the
accurate estimate of fair cash value for similar properties in the
jurisdiction either without direct observation of such similar
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properties or without dir ect sales price information for such
similar properties using a reliable statistical or other method to
estimate the values of such properties;
2. "Additional homestead exemption" means the exemption
provided by Section 2890 of this title;
3. "Assessor" means the county assessor and, unless the context
clearly requires otherwise, deputy assessors and persons employed by
the county assessor in performance of duties imposed by law;
4. "Assess and value" means to establish the fair cash value
and taxable fair cash value of taxable real and personal proper ty
pursuant to requirements of law;
5. "Assessed valuation" or "assessed value" means the
percentage of the fair cash value of personal property, or the
percentage of the taxable fair cash value of real pro perty, pursuant
to the provisions of Sections 8 a nd 8B of Article X of the Oklahoma
Constitution, either of individual items of personal property,
parcels of real property or the aggregate total of such individual
taxable items or parcels within a jurisdic tion;
6. "Assessment percentage" means the perce ntage applied to
personal property and real property pursuant to Section 8 of Article
X of the Oklahoma Constitution;
7. "Assessment ratio" means the relationship between assessed
value and taxable fair cas h value for a county or for use categories
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within a county expressed as a percentage determined in the annual
equalization ratio study;
8. "Assessment roll" means a computerized or noncomputerized
record required by law to be kept by the county assessor a nd
containing information about property within a taxing jurisdiction;
9. "Assessment year" means the year beginning January 1 of each
calendar year and ending on December 31 preceding the following
January 1 assessment date;
10. "Circuit breaker" means the form of property tax relief
provided by Sections 2904 through 2911 of this title;
11. "Class of subjects" means a category of property
specifically designated pursuant to provisions of the Oklahoma
Constitution for purposes of ad valorem taxation;
12. "Code" means the Ad Valorem Tax Code, Section 2 801 et seq.
of this title;
13. "Coefficient of dispersion" means a statistical measure of
assessment uniformity for a category of property or for all property
within a taxing jurisdiction;
14. "Confidence level" means a statistical procedure for
determining the degree of reliability for use in reporting the
assessment ratio for a taxing jurisdiction;
15. "Cost approach" means a method used to establish the fair
cash value of property involving an estimate of current construction
cost of improvements, sub tracting accrued depreciation and adding
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the value of land including any loss in value that may be caused by
physical deterioration, functional obsolescence or economic
obsolescence and adding the value of t he land.
a. Physical deterioration is a cause of depreciation that
is a loss in value due to ordinary wear and tear and
the forces of nature.
b. Functional or internal obsolescence is the loss in
value of a property resulting from changes in tastes,
preferences, technical innovations or market
standards.
c. Economic or external obsolescence is a cause of
depreciation that is a loss in value as a result of
impairment in utility and desirability caused by
factors outside the boundaries of the property or loss
of value in a property (relative to the cost of
replacing it with a property of equal utility) that
stems from factors external to the property ;
16. "County board of equalization" means the board which, upon
hearing competent evidence, has the authority to correct and adjust
the assessment rolls in its respective county to conform to fair
cash value and such other responsibilities as prescribed in Section
2801 et seq. of this title;
17. "Equalization" means the process for making adjustments to
taxable property values within a county by analyzing the
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relationships between assessed values and fair cash values in one or
more use categories within the county or between counties by
analyzing the relationship between assessed value and fair cash
value in each county;
18. "Equalization ratio study" means the analysis of the
relationships between assessed values and fair cash values in the
manner provided by law;
19. "Fair cash value" or "market value" means the value or
price at which a willing buyer would pur chase property and a willing
seller would sell pr operty if both parties are knowledgeable about
the property and its uses and if neither party is under any undue
pressure to buy or sell and for real property shall mean the value
for the highest and best us e for which such property was actually
used, or was previously classified for use, during the calendar year
next preceding the applicable January 1 assessment date;
20. "Homestead exemption" means the reduction in the taxable
value of a homestead as autho rized by law;
21. "Income and expense approach" means a method to estimate
fair cash value of a property by determining the present value of
the projected income stream;
22. "List and assess" means the process by which taxable
property is discovered, its description recorded for purposes of ad
valorem taxation and its fair cash value and taxable fair cash value
are established;
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23. "Mill" or "millage" means the rate of tax imposed upon
taxable value. One (1) mill equals One Dollar ($1.00) of tax for
each One Thousand Dollars ($1,000.00) of taxable val ue;
24. "Multiple regression analysis" means a statistical
technique for estimating unknown data on the basis of known and
available data;
25. "Parcel" means a contiguous area of land described in a
single description by a deed or other instrument or as one of a
number of lots on a plat or plan, separately owned and capable of
being separately conveyed;
26. "Sales comparison approach" means the collection,
verification, and screening of sales data, stratif ication of sales
information for purposes of comp arison and use of such information
to establish the fair cash value of taxable property;
27. "State Board of Equalization" means the Board responsible
for valuation of railroad, airline and public service c orporation
property and the adjustment and equali zation of all property values
both centrally and locally assessed;
28. "Taxable value" means the percentage of the fair cash value
of personal property or the taxable fair cash value of real
property, less applicable exemptions, upon which an ad valorem t ax
rate is levied pursuant to the provisions of Section 8 and Section
8B of Article X of the Oklahoma Constitution;
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29. "Taxable fair cash value" means the fair cash value of
locally assessed real property as capped pursuant to Section 8B of
Article X of the Oklahoma Constitution;
30. "Use category" means a subcategory of real property, that
is either agricultural use, residential use or commercial/industrial
use but does not and shall not constitute a clas s of subjects within
the meaning of the Oklahoma Constitution for purposes of ad valorem
taxation;
31. "Use value" means the basis for establishing fair cash
value of real property pursuant to the requirement of Section 8 of
Article X of the Oklahoma Cons titution; and
32. "Visual inspection program" me ans the program required in
order to gather data about real property from physical examination
of the property and improvements in order to establish the fair cash
values of properties so inspected at least once each four (4) years
and the fair cash values of similar properties on an annual basis.
SECTION 2. AMENDATORY 68 O.S. 2011, Section 2875, as
amended by Section 1, Chapter 142, O.S.L. 2015 (68 O.S. Supp. 2020 ,
Section 2875), is amended to read as follows:
Section 2875. A. T here is hereby created within the Oklahoma
Tax Commission the Ad Valorem Division. The Ad Valorem Division
shall have the authority and it shall be its duty to:
1. Confer with and assist county assessors a nd county boards of
equalization in the performan ce of their duties, to the end that all
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assessments of property be made relative, just and uniform and that
real property and tangible personal property may be assessed at its
fair cash value estimated at th e price it would bring at a fair
voluntary sale;
2. Prescribe forms with numbers ascribed thereto for the county
assessors' use in assessment procedure, including property
classification and appraisal forms;
3. Provide technical assistance to county asse ssors and county
boards of equalization in the se rvices of appraisal engineers;
4. Provide from year to year schedules of values of personal
property in accordance with Uniform Standards of Professional
Appraisal Practice (USPAP) and International Associa tion of
Assessing Officers (IAAO) requirements to aid county assessors in
the assessment of personal property;
5. Conduct training schools, institutes, conferences and
meetings for the purpose of improving the qualifications of county
assessors and their deputies as required by law;
6. Prepare and furn ish from time to time to county assessors an
assessors' manual. Such manual shall include, but not be limited
to, valuation methodologies for property in a county for which no
comparable property exists in order for a county assessor to
establish a value for ad valorem tax purposes. The manual shall
include information concerning valuation of hazardous waste disposal
facilities and such other types of facilities as may be requested by
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the county assessor fo r which the assessor does not have adequate
data to value such property;
7. Render such other assistance as may be conducive to the
proper assessment of property for ad valorem taxation;
8. Recommend rules to the Tax Commission establishing uniform
procedures and standards for the appraisal of real pro perty by
county assessors;
9. Develop assessment manuals for the valuation of manufactured
homes and periodic updates for such manuals for use by county
assessors; and
10. Promptly notify county assessors, county treasurers and
members of county excise a nd equalization boards of any changes to
the laws relating to ad valorem taxation.
B. The county assessors shall not use any form not prescribed
or approved by the Ad Valorem Division.
C. Each county asses sor shall comply with the rules and guides
adopted by the Oklahoma Tax Commission.
D. The Ad Valorem Division, upon request of any county
assessor, shall furnish to the county assessor any information shown
by its files and records as to any real and pers onal property,
subject to taxation, including inc ome and expense data as shown by
income tax returns, to the end that no property shall escape
taxation, and this information is to be furnished notwithstanding
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any statute that such files and records shall b e confidential and
privileged.
E. The Ad Valorem Division shall be authorized to obtain
information relating to the ownership, location, taxable status or
valuation for purposes of ad valorem taxation of real or personal
property from any state agency, bo ard, commission, department,
authority or other d ivision of state government if necessary to
respond to a request by a county assessor as provided by subsection
D of this section. Such information shall be confidential and
privileged and shall only be rel eased to a county assessor in order
to locate, discover and correctly value taxable property as required
by law.
SECTION 3. This act shall become effective November 1, 2021 .
COMMITTEE REPORT BY: COMMITTEE ON FINANCE
April 6, 2021 - DO PASS