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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
HOUSE BILL 3961 By: Echols
AS INTRODUCED
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 2802, which relates to definitions
used in the Ad Valorem Tax Cod e; providing definition
of rural internet service provider; amending 68 O.S.
2021, Section 2803, which relates to classification
of subjects for purposes of ad valorem taxation;
providing classification of certain rural internet
service providers; prescribing requirements for
valuation and determination of taxable values;
prescribing procedures for election and revocation of
election; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 20 21, 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 and analysis of in formation about
taxable properties within a taxing jurisdiction permitting the
accurate estimate of f air cash value for similar properties in the
jurisdiction either without direct observation of such similar
properties or without direct sales price inform ation for such
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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 asses sor 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 taxab le 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 property, pursuant
to the provisions of Sections 8 and 8B of Article X of the Oklahoma
Constitution, either of individual item s of personal property,
parcels of real property or the aggregate total of such individual
taxable items or parcels within a jurisdiction;
6. "Assessment percentage" means the percentage applied to
personal property and real p roperty pursuant to Sec tion 8 of Article
X of the Oklahoma Constitution;
7. "Assessment ratio" means the relationship between assessed
value and taxable fair cash value for a county o r for use categories
within a county expressed as a percentage determined in the annual
equalization ratio study;
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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 taxin g 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 t ax relief
provided by Sections 29 04 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;
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 constructio n
cost of improvements, subtracti ng accrued depreciation including any
loss in value that may b e caused by physical deterioration,
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functional obsolescence or economic obsolescen ce and adding the
value of the land.
a. Physical deterioration is a cause of de preciation 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 obsolescen ce is a cause of
depreciation that is a loss in value as a res ult of
impairment in utility and desirability caused by
factors outside the bounda ries of the property or loss
of value in a property (relative to the cost of
replacing it with a property of equ al 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 r espective county to conform to fa ir
cash value and such other responsibi lities as prescribed in Section
2801 et seq. of this title;
17. "Equalization" means the process for mak ing adjustments to
taxable property values within a county by analyzing the
relationships between assessed value s and fair cash values in one or
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more use categories within the coun ty 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 value s 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 prop erty if both parties are knowledg eable 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, d uring 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 an d 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 D ollar ($1.00) of tax for
each One Thousand Dollars ($1,000.00) of taxable value ;
24. "Multiple regression analy sis" means a statistical
technique for estimating unknown data on th e 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 on e of a
number of lots on a plat o r plan, separately owned and capable of
being separately conve yed;
26. "Rural internet service provider " means a lawfully
recognized business entity offering internet services on a
subscription basis if the majority of the subscribers reside in a
rural census tract as defined pursuant to the laws governing the
preparation of the United States Census;
27. "Sales comparison approach " means the collection,
verification, and screening of sales data, stratification of sales
information for purposes of comparis on and use of such information
to establish the fair cash value of taxable property;
27. 28. "State Board of Equalization " means the Board
responsible for valuation of railroad, airline and public service
corporation property and the adjustment and equaliz ation of all
property values both centrally and locally assessed;
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28. 29. "Taxable value" means the percentage of the fair cash
value of personal property or the taxable fair cash value of real
property, less applicable e xemptions, 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. 30. "Taxable fair cash value" means the fair cash value of
locally assessed real property as cappe d pursuant to Section 8B of
Article X of the Oklahoma Constitution;
30. 31. "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
class of subjects within the meaning of the O klahoma Constitution
for purposes of ad valorem taxation;
31. 32. "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. 33. "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 le ast once each
four (4) years and the fair cash values of similar properties on an
annual basis.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2803, is
amended to read as follows:
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Section 2803. A. The Legislature, pursuant to autho rity of
Article X, Section 22 of the O klahoma Constitution, hereby
classifies the following types of p roperty for purposes of ad
valorem taxation:
1. Real property;
2. Personal property, exce pt as provided in paragraph 3 of this
subsection;
3. Personal property which is household goods of t he head of
families and livestock employed in support of the family in thos e
counties which have exempted such property pursuant to subsection
(b) of Section 6 of Article X of th e Oklahoma Constitution;
4. Public service corporation property; and
5. Railroad and air carrier property ; and
6. Rural internet service provider property if the rural
internet service provider opts for local assessment by the
applicable county assessor pursuant to the provision s of this
paragraph. A rural internet service prov ider that files an election
with the county assessor of the county in w hich any real property or
personal property ow ned by such rural internet service pro vider is
located shall have real and personal property values for such
property established by the applicable county assessor and the
taxable value of such property shall be computed by the applicable
county assessor according to the same requirements as other real and
personal property. If an election is filed pursuant to this
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paragraph the election shall be filed not later than March 15 of any
calendar year and shall be in force and effect until re voked by the
rural internet service provider. A rural i nternet service provider
that does not file an election pursuant to this paragraph or which
revokes an election as authorize d by this paragraph shall have its
real and personal property valued for ad valorem tax purposes by the
State Board of Equaliza tion in the same manner prescribed by law for
the valuation of publ ic service corporation property and the State
Board of Equalization shall compute the taxable value of such
property according to the same requirements as the property of
public service corporations. The Oklahoma Tax Commission shall
prescribe forms for the election and revocation of elections as
authorized by this paragraph .
B. Valuation of each class of subjects shall be made by a
method appropriate for each class or any subclass thereof, as
established by the Ad Valorem Division of the Oklahoma Tax
Commission.
C. Classification as provided b y this section shall require
uniform treatment of each item within a class or any subclass a s
provided in Article X, Section 5 of the Oklahoma Constituti on.
SECTION 3. This act shall become effective January 1, 2025.
59-2-8444 MAH 01/01/24