Oklahoma Senate Bill SB753

Oklahoma 2022 Regular Session

• Introduced: 2/1/21
• Refer: 2/2/21
• Report Pass: 2/9/21

Caption

Governmental entities; requiring payment in lieu of ad valorem tax for certain entities that purchase property. Effective date.

Impact

The bill is expected to have a significant impact on state laws concerning property taxation and governmental financial obligations. By codifying the requirement for trust entities to make tax payments, the legislation aims to provide a more consistent and predictable source of revenue for counties. The indexation of payment amounts based on the Consumer Price Index further ensures that these payments keep pace with inflation, thereby protecting local government revenue from erosion over time. This change could be particularly beneficial for counties that rely heavily on property tax revenues to fund their services.

Summary

Senate Bill 753 seeks to establish a system wherein governmental entities operating as a trust will be required to make payments in lieu of ad valorem taxes for properties they acquire. The bill mandates that these payments are equal to the ad valorem taxes assessed on the property immediately before its purchase. This requirement aims to ensure that local governments continue to receive tax revenue despite the transfer of property ownership to these entities. The intent is to maintain fiscal stability for local jurisdictions that may be affected by the change in property ownership status.

Sentiment

The general sentiment surrounding SB 753 appears to be supportive, particularly among local government officials and representatives who view it as a necessary measure to uphold local tax revenues. Proponents of the bill argue that it provides fairness in taxation, as governmental entities will not escape their fiscal responsibilities. However, there may also be concerns from some watchdog groups regarding how these changes could affect the accountability of governmental entities and the transparency of their financial operations.

Contention

One notable point of contention regarding SB 753 is the extent to which it affects trust entities and their financial operations. Critics may argue that forcing these entities to make payments in lieu of taxes could hamper their ability to operate efficiently or impact their funding for services. There may also be discussions about whether the indexed payments are sufficient to cover the actual costs associated with property acquisition and maintenance. These factors indicate that while the bill aims to standardize tax obligations, the implementation and effect may require careful monitoring and adjustment.