An Act
ENROLLED HOUSE
BILL NO. 2775 By: Pfeiffer of the House
and
Montgomery and Pederson 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 Divi sion of the
Oklahoma Tax Commission; and providing an effective
date.
SUBJECT: Revenue and taxation
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. Supp. 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 collection an d 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
properties or without direct sa les price information for such
similar properties using a reliable statistical or other method to
estimate the values of such properties;
ENR. H. B. NO. 2775 Page 2
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 property
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 prope rty, pursuant
to the provisions of Sections 8 and 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 jurisdicti on;
6. "Assessment percentage" means the percentage 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
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 and
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" mea ns 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 2801 et seq.
of this title; ENR. H. B. NO. 2775 Page 3
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 e stimate of current construction
cost of improvements, subtracting accrued depreciation and adding
the value of land including any loss in value that may be caused by
physical deterioration, functional obsolescence or economic
obsolescence and adding the va lue of the 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 tast es,
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 prope rty 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 th e 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
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; ENR. H. B. NO. 2775 Page 4
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 purchase property and a willing
seller would sell property 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 use 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 authorized 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;
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 value;
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, stratification of sales
information for purposes of comparison and use of such information
to establish the fair cash value of taxable property;
ENR. H. B. NO. 2775 Page 5
27. "State Board of Equalization" means the Board responsible
for valuation of railroad, airli ne and public service corporation
property and the adjustment and equalization 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 tax
rate is levied pursuant to the provisions of Section 8 and Section
8B of Article X of the Oklahoma Constitution;
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 s hall not constitute a class 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 Constitution; and
32. "Visual inspection program" means 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. There 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 and county boards of
equalization in the performance of their duties, to the end that all
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 the price it would bring at a fair
voluntary sale; ENR. H. B. NO. 2775 Page 6
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 assessors and county
boards of equalization in the services 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 Association 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 qualificat ions of county
assessors and their deputies as required by law;
6. Prepare and furnish 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 whi ch 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
the county assessor for 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 property 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 and 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 A d Valorem Division. ENR. H. B. NO. 2775 Page 7
C. Each county assessor 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 personal property,
subject to taxation, including income 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
any statute that such files and records shall be 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, board, commission, department,
authority or other division 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 confi dential and
privileged and shall only be released 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 .
ENR. H. B. NO. 2775 Page 8
Passed the House of Representatives the 3rd day of March, 2021.
Presiding Officer of the House
of Representatives
Passed the Senate the 20th day of April, 2021.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor t his ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _ ______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________