Oklahoma 2024 Regular Session

Oklahoma House Bill HB3961 Compare Versions

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3		-	ENGR. S. A. TO ENGR. H. B. NO. 3961 Page 1 1
	3	+	SENATE FLOOR VERSION - HB3961 SFLR Page 1
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28		-	ENGROSSED SENATE AMENDMENT
29		-	TO
30		-	ENGROSSED HOUSE
31		-	BILL NO. 3961 By: Echols of the House
	29	+	SENATE FLOOR VERSION
	30	+	April 8, 2024
	31	+
	32	+
	33	+	COMMITTEE SUBSTITUTE
	34	+	FOR ENGROSSED
	35	+	HOUSE BILL NO. 3961 By: Echols of the House
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33	37		and
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35	39		Hall of the Senate
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40		-	An Act relating to revenue and taxation; amending 68
41		-	O.S. 2021, Section 280 2, which relates to definitions
42		-	used in the Ad Valorem Tax Code ; providing definition
43		-	of rural internet service provider; amending 68 O.S.
44		-	2021, Section 2803, which relates to classification
45		-	of subjects for purposes of ad valorem taxation;
46		-	providing classification of certain rural internet
47		-	service providers; prescribi ng requirements for
48		-	valuation and determination of taxable values;
49		-	prescribing procedures for election and revocation of
50		-	election; and providing an effective date .
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56		-	AMENDMENT NO. 1. Page 1, strike the title, enacting clause and
57		-	entire bill and insert
58		-
59		-
60		-	“[ ad valorem tax - centrally assessed property -
	43	+	[ ad valorem tax - centrally assessed property -
61	44		broadband service providers - effective date ]
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66	49		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
67	50		SECTION 1. AMENDATORY 68 O.S. 2021, Section 2808, is
68	51		amended to read as follows:
69	52		Section 2808. A. As used in the Ad Valorem Tax Code:
	53	+	1. “Broadband service providers ” means a subclass of public
	54	+	service corporations consisting of any public service corporation
	55	+	offering broadband-based services including Internet access, Voice
	56	+	over Internet Protocol, or Internet Protocol television to end user
	57	+	consumers;
	58	+	2. “Public service corporation” means all transportation
	59	+	companies, transmission companies, all gas, electric, light, heat ,
	60	+	and power companies, and all waterworks and water power companies,
	61	+	and all persons authorized to exercise the right of eminent domain
	62	+	or to use or occupy any rig ht-of-way, street, alley, or public
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96		-	1. “Public service corporation” means all transportation
97		-	companies, transmission companies, all gas, electric, light, heat ,
98		-	and power companies, and all waterworks and water power companies,
99		-	and all persons authorized to exercise the right of eminent domain
100		-	or to use or occupy any right -of-way, street, alley, or public
101	90		highway, along, over , or under the same in a manner not permitted to
102	91		the general public;
103		-	2. “Transportation company” means any company, corporation,
	92	+	2. 3. “Transportation company ” means any company, corporation,
104	93		trustee, receiver, or any other person owning, leasing , or operating
105	94		for hire, a street railway, canal, steamboat line, and also any
106	95		sleeping car company, parlor car company , and express company, and
107	96		any other company, trustee, or person in any way engaged in such
108	97		business as a common carrier. As used in the Ad Valorem T ax Code,
109	98		the term “transportation company ” transportation company shall not
110	99		include any railroad or any air carrier. However, all railroad and
111	100		air carrier property shall continue to be valued and assessed by the
112	101		State Board of Equalization for purposes of ad valorem taxation;
113		-	3. “Transmission company” means any company, corporation,
	102	+	3. 4. “Transmission company ” means any company, corporation,
114	103		trustee, receiver, or other person owning, leasing , or operating for
115	104		hire any telegraph or telephone line or radio broadcasting system;
116		-	4. “Person” means individuals, partnerships, associations, and
117		-	corporations in the singular as well as plural number;
	105	+	4. 5. “Person” means individuals, p artnerships, associations,
	106	+	and corporations in the singular as well as plural number;
	107	+	5. 6. “Video services provider ” means a subclass of public
	108	+	service corporations consisting of any public service corporation
	109	+	offering video programming servi ces;
	110	+	6. 7. “Video programming” shall have the same meaning as set
	111	+	forth in 47 U.S.C., Section 522(20); and
	112	+	7. 8. “Fixed wireless broadband Internet service provider ”
	113	+	means an entity that solely offers access to the Internet through a
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144		-	5. “Video services provider” means a subclass of public service
145		-	corporations consistin g of any public service corporation offering
146		-	video programming services;
147		-	6. “Video programming” shall have the same meaning as set forth
148		-	in 47 U.S.C., Section 522(20); and
149		-	7. “Fixed wireless broadband Internet service provider” means
150		-	an entity that solel y offers access to the Internet through a
151	141		stationary fixed point -to-point connection often requiring direct
152	142		line of sight between the provider ’s wireless transmitter and its
153		-	end-user consumer’s receiver ; and
154		-	8. “Broadband service providers” means a subcla ss of public
155		-	service corporations consisting of any public service corporation
156		-	offering broadband-based services including Internet access, Voice
157		-	over Internet Protocol, or Internet Protocol television to end -user
158		-	consumers. For the purposes of this parag raph, “broadband” means
159		-	wired internet at speeds in excess of one hundred megabits per
160		-	second (100 Mbps) for download and twenty megabits per second (20
161		-	Mbps) for upload.
	143	+	end-user consumer’s receiver.
162	144		B. As used in the Ad Valorem Tax Code, “transmission company ”
163	145		transmission company and “public service corporatio n” public service
164	146		corporation shall not be construed to include cable television
165	147		companies or fixed wireless broadband Internet service providers.
166	148		C. Any real or personal property used by any company,
167	149		corporation, trustee, receiver, or other person owning, leasing, o r
	150	+	operating for hire any pipeline or oil or gas gathering system which
	151	+	was assessed by the State Board of Equalization after January 1,
	152	+	1997, shall continue to be assessed by the State Board of
	153	+	Equalization through ad valorem tax year 1998.
	154	+	SECTION 2. AMENDATORY 68 O.S. 2021, Section 2847, is
	155	+	amended to read as follows:
	156	+	Section 2847. A. The property of all railroads, air carriers ,
	157	+	and public service corporations shall be assessed annually by the
	158	+	State Board of Equalization at its fair cash value estimated at the
	159	+	price it would bring at a fair voluntary sale.
	160	+	B. Taxable values of real and personal property of all
	161	+	railroads, air carriers , and public service corporations shall be
	162	+	established in accordance with the requir ements of Section 8 of
	163	+	Article X of the Oklahoma Constitution. The State Board of
	164	+	Equalization shall determine the taxable value of all taxable
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194		-	operating for hire any pipeline or oil or gas gathering system which
195		-	was assessed by the State Board of Equalization after January 1,
196		-	1997, shall continue to be assessed by the State Board of
197		-	Equalization through ad valorem tax year 1998.
198		-	SECTION 2. AMENDATORY 68 O.S. 2021, Section 2847, is
199		-	amended to read as follows:
200		-	Section 2847. A. The property of all railroads, air carriers ,
201		-	and public service corporations shall be assessed annually by the
202		-	State Board of Equalization at its fair cash value estimated at the
203		-	price it would bring at a fair voluntary sale.
204		-	B. Taxable values of real and personal property of all
205		-	railroads, air carriers , and public service corporations shall be
206		-	established in accordance with the requirements of Section 8 of
207		-	Article X of the Oklahoma Constitution. The State Board of
208		-	Equalization shall determine the taxable value of all taxable
209	192		property that the Board is required by law to assess and value, and
210	193		shall determine such taxable value in accordance with t he
211	194		requirements of Section 8 of Article X of the Oklahoma Constitution.
212	195		C. The State Board of Equalization shall assess the property of
213	196		that subclass of public service corporations known as video services
214	197		providers, as defined in Section 2808 of this title, as provided:
215	198		1. Every video services provider shall file with the State
216	199		Board of Equalization a certification regarding total gross receipts
217	200		for the immediate preceding calendar year by April 15 and shall
	201	+	specify the total gross receipts derived from v ideo programming
	202	+	services;
	203	+	2. The State Board of Equalization shall determine the
	204	+	percentage of gross receipts the video services provider has derived
	205	+	from video programming in the immediately preceding calendar year;
	206	+	and
	207	+	3. The percentage de termined pursuant to paragraph 2 of this
	208	+	subsection shall be applied to the taxable fair cash value allocated
	209	+	to Oklahoma, and the resulting fair cash value attributable to video
	210	+	programming services shall be assessed using the statewide average
	211	+	of the assessment rati os applied to the assets of cable television
	212	+	companies in that tax year. Unless the taxpayer or the State Board
	213	+	of Equalization demonstrates otherwise, the statewide average
	214	+	assessment ratio applied to the personal property of a cable
	215	+	television company shall be assumed to be twelve percent (12%).
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244		-	specify the total gross receipts derived from video programming
245		-	services;
246		-	2. The State Board of Equalization shall determine the
247		-	percentage of gross receipts the video services provider has derived
248		-	from video programming in the immediately preceding calendar ye ar;
249		-	and
250		-	3. The percentage determined pursuant to paragraph 2 of this
251		-	subsection shall be applied to the taxable fair cash value allocated
252		-	to Oklahoma this state, and the resulting fair cash value
253		-	attributable to video programming services shall be assesse d using
254		-	the statewide average of the assessment ratios applied to the assets
255		-	of cable television companies in that tax year. Unless the taxpayer
256		-	or the State Board of Equalization demonstrates otherwise, the
257		-	statewide average assessment ratio applied to t he personal property
258		-	of a cable television company shall be assumed to be twelve percent
259		-	(12%).
260		-	D. The percentage of fair cash value for real and personal
	243	+	D. The State Board of Equalization shall assess the property
	244	+	used to provide broadband service placed in service after the
	245	+	effective date of this act of that subclass of public service
	246	+	corporations known as broa dband service providers, as defined in
	247	+	Section 2808 of this title, at a ratio of fifteen percent (15%) for
	248	+	the year 2025 and subsequent years .
	249	+	E. The percentage of fair cash value for real and personal
261	250		property of railroads, air carriers , and public service corporations
262	251		required by the Oklahoma Constitution to be taxable shall be the
263	252		percentage at which it was assessed on January 1, 1996, in
264	253		accordance with the provisions of paragraph 3 of subsection A of
265	254		Section 8 of Article X of the Oklahoma Constitution , and, subject to
266	255		the requirements of federal law, shall be uniformly applied to
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293	256		calculate the taxable values of public service corporation property
294	257		within the state for the applicable assessment year.
295		-	E. The State Board of Equalization shall assess the property
296		-	used to provide wired broadband service that is constructed or
297		-	installed and placed in service after the effective date of this
298		-	act, in an area where the coverage for wired internet at speeds in
299		-	excess of one hundred megabits per second (100 Mbps) for download
300		-	and twenty megabits per second (20 Mbps) for upload is equal to or
301		-	less than fifty percent (50%) according to the most recent FCC
302		-	National Broadband Map published by the Federal Communications
303		-	Commission at the time the property is constructed or installed and
304		-	placed in service, of that su bclass of public service corporations
305		-	known as broadband service providers, as defined in Section 2808 of
306		-	this title, at a ratio of fifteen percent (15%) for the year 2025
307		-	and subsequent years. Provided, the property assessed pursuant to
308		-	this subsection shall only include property exclusively used to
309		-	provide broadband internet service to areas meeting the coverage
310		-	requirements as provided in this subsection including fiber, cable,
311		-	transmission lines, fiber support infrastructure, cable support
312		-	infrastructure, transmission line support infrastructure, network
313		-	infrastructure, and facilities used to contain network
314		-	infrastructure. The valuation of all assets shall be calculated on
315		-	a net book basis to each assessment rate as provided in this
316		-	subsection and subsection D of this section. The Oklahoma Tax
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343		-	Commission may promulgate rules to effectuate the provisions of this
344		-	subsection.
345		-	SECTION 3. This act shall become effective January 1, 202 5.”
346		-
347		-	Passed the Senate the 25th day of April, 2024.
348		-
349		-
350		-
351		-	Presiding Officer of the Senate
352		-
353		-
354		-	Passed the House of Representatives the ____ day of __________,
355		-	2024.
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359		-	Presiding Officer of the House
360		-	of Representatives
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387		-	ENGROSSED HOUSE
388		-	BILL NO. 3961 By: Echols of the House
389		-
390		-	and
391		-
392		-	Hall of the Senate
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399		-	An Act relating to revenue and taxation; amending 6 8
400		-	O.S. 2021, Section 2802, which relates to definitions
401		-	used in the Ad Valorem Tax Cod e; providing definition
402		-	of rural internet service provider; amending 68 O.S.
403		-	2021, Section 2803, which relates to classification
404		-	of subjects for purposes of ad valorem taxation;
405		-	providing classification of certain rural internet
406		-	service providers; prescribing requirements for
407		-	valuation and determination of taxable values;
408		-	prescribing procedures for election and revocation of
409		-	election; and providing an effective date .
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415		-	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
416		-	SECTION 4. AMENDATORY 68 O.S. 2021, Section 2802, is
417		-	amended to read as follows:
418		-	Section 2802. As used in Section 2801 et seq. of this title:
419		-	1. "Accepted standards fo r mass appraisal practice" means those
420		-	standards for the collection and analysis of in formation about
421		-	taxable properties within a taxing jurisdiction permitting the
422		-	accurate estimate of f air cash value for similar p roperties in the
423		-	jurisdiction either with out direct observation of such similar
424		-	properties or without direct sales price inform ation for such
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451		-	similar properties using a reliable statistical or other method to
452		-	estimate the values of such properties;
453		-	2. "Additional homestead exemption " means the exemption
454		-	provided by Section 2890 of this title;
455		-	3. "Assessor" means the county asses sor and, unless the context
456		-	clearly requires otherwise, deputy assessors and persons employed by
457		-	the county assessor in performan ce of duties imposed by law;
458		-	4. "Assess and value" means to establish the fair cash value
459		-	and taxable fair cash value of taxab le real and personal property
460		-	pursuant to requirements of law;
461		-	5. "Assessed valuation" or "assessed value" means the
462		-	percentage of the fair cash value of personal proper ty, or the
463		-	percentage of the taxable fair cash value of real property, pursuant
464		-	to the provisions of Sections 8 and 8B of Article X of the Oklahoma
465		-	Constitution, either of individual item s of personal property,
466		-	parcels of real property or the aggregate tot al of such individual
467		-	taxable items or parcels within a jurisdiction;
468		-	6. "Assessment percentage" means the percentage applied to
469		-	personal property and real p roperty pursuant to Sec tion 8 of Article
470		-	X of the Oklahoma Constitution;
471		-	7. "Assessment ratio" means the relationship between assessed
472		-	value and taxable fair cash value for a county o r for use categories
473		-	within a county expressed as a percentage determined in the annual
474		-	equalization ratio study;
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501		-	8. "Assessment roll" means a computerized or noncompute rized
502		-	record required by law to be kept by the county assessor and
503		-	containing information about property within a taxing jurisdiction;
504		-	9. "Assessment year" means the year beginning January 1 of each
505		-	calendar year and ending on December 31 preceding the fo llowing
506		-	January 1 assessment date;
507		-	10. "Circuit breaker" means the form of property t ax relief
508		-	provided by Sections 2904 through 2911 of this title;
509		-	11. "Class of subjects" means a category of property
510		-	specifically designated pursuant to provisions of th e Oklahoma
511		-	Constitution for purposes of ad valorem taxation;
512		-	12. "Code" means the Ad Valorem Tax Code, Section 2801 et seq.
513		-	of this title;
514		-	13. "Coefficient of dispersion" means a statistical measure of
515		-	assessment uniformity for a category of property or for all property
516		-	within a taxing jurisdiction;
517		-	14. "Confidence level" means a statistical procedure for
518		-	determining the degree of reliability for use in reporting the
519		-	assessment ratio for a taxing jurisdiction;
520		-	15. "Cost approach" means a method used to establish the fair
521		-	cash value of property involving an estimate of current constructio n
522		-	cost of improvements, subtracting accrued depreciation including any
523		-	loss in value that may b e caused by physical deterioration ,
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549		-
550		-	functional obsolescence or economic obs olescence and adding the
551		-	value of the land.
552		-	a. Physical deterioration is a cause of de preciation that
553		-	is a loss in value due to ordinary wear and tear and
554		-	the forces of nature.
555		-	b. Functional or internal obsolescence is the loss in
556		-	value of a property resul ting from changes in tastes,
557		-	preferences, technical innovations or market
558		-	standards.
559		-	c. Economic or external obsolescence is a cause of
560		-	depreciation that is a loss in value as a res ult of
561		-	impairment in utility and d esirability caused by
562		-	factors outside the boundaries of the property or loss
563		-	of value in a property (relative to the cost of
564		-	replacing it with a property of equal utility) that
565		-	stems from factors external to the property;
566		-	16. "County board of equalization " means the board which, upon
567		-	hearing competent evidence, has the authority to correct and adjust
568		-	the assessment rolls in its r espective county to conform to fair
569		-	cash value and such other responsibi lities as prescribed in Section
570		-	2801 et seq. of this titl e;
571		-	17. "Equalization" means the process for making adjustments to
572		-	taxable property values within a county by analyzing the
573		-	relationships between assessed values and fair cash values in one or
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600		-	more use categories within the coun ty or between counties by
601		-	analyzing the relationship between assessed value and fair cash
602		-	value in each county;
603		-	18. "Equalization ratio study " means the analysis of the
604		-	relationships between assessed values and fair cash value s in the
605		-	manner provided by law;
606		-	19. "Fair cash value" or "market value" means the value or
607		-	price at which a willing buyer would purchase property and a willing
608		-	seller would sell prop erty if both parties are knowledgeable about
609		-	the property and its uses and if neither party is under any undue
610		-	pressure to buy or sell and for real property shall mean th e value
611		-	for the highest and best use for which such property was actually
612		-	used, or was previously classified for use, during the calendar year
613		-	next preceding the applicable January 1 assessment date;
614		-	20. "Homestead exemption" means the reduction in the ta xable
615		-	value of a homestead as authorized by law;
616		-	21. "Income and expense approach " means a method to estimate
617		-	fair cash value of a property by determining the present value of
618		-	the projected income stream;
619		-	22. "List and assess" means the process by which taxable
620		-	property is discovered, its description recorded for purposes of ad
621		-	valorem taxation and its fair cash value and taxable fair cash value
622		-	are established;
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648		-
649		-	23. "Mill" or "millage" means the rate of tax impose d upon
650		-	taxable value. One (1) mill equal s One Dollar ($1.00) of tax for
651		-	each One Thousand Dollars ($1,000.00) of taxable value ;
652		-	24. "Multiple regression analysis" means a statistical
653		-	technique for estimating unknown data on th e basis of known and
654		-	available data;
655		-	25. "Parcel" means a contiguous area of land described in a
656		-	single description by a deed or other instrument or as on e of a
657		-	number of lots on a plat or plan, separately owned and capable of
658		-	being separately conve yed;
659		-	26. "Rural internet service provider" means a lawfully
660		-	recognized business entity offering internet services on a
661		-	subscription basis if the majority of the subscribers reside in a
662		-	rural census tract as defined pursuant to the laws governing the
663		-	preparation of the United States Census ;
664		-	27. "Sales comparison approach " means the collection,
665		-	verification, and screening of sales data, stratification of sales
666		-	information for purposes of comparison and use of such information
667		-	to establish the fair cash value of taxable property;
668		-	27. 28. "State Board of Equalization " means the Board
669		-	responsible for valuation of railroad, airline and public service
670		-	corporation property and the adjustment and equalization of all
671		-	property values both centrally and locally assessed;
672		-
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698		-	28. 29. "Taxable value" means the percentage of the fair cash
699		-	value of personal property or the taxable fair cash value of real
700		-	property, less applicable e xemptions, upon which an ad valorem tax
701		-	rate is levied pursuant to the provisions of Section 8 and Section
702		-	8B of Article X of the Oklahoma Constitution;
703		-	29. 30. "Taxable fair cash value" means the fair cash value of
704		-	locally assessed real property as cappe d pursuant to Section 8B of
705		-	Article X of the Oklahoma Constitution;
706		-	30. 31. "Use category" means a subcategory of real property,
707		-	that is either agricultural use, residen tial use or
708		-	commercial/industrial use but does not and shall not constitute a
709		-	class of subjects within the meaning of the Oklahoma Constitution
710		-	for purposes of ad valorem taxation;
711		-	31. 32. "Use value" means the basis for establishing fair cash
712		-	value of real property pursuant to the requirement of Section 8 of
713		-	Article X of the Oklahoma Cons titution; and
714		-	32. 33. "Visual inspection program" means the program required
715		-	in order to gather data about real property from physical
716		-	examination of the property and improvements in order to establish
717		-	the fair cash values of properties so inspected at le ast once each
718		-	four (4) years and the fair cash values of similar properties on an
719		-	annual basis.
720		-	SECTION 5. AMENDATORY 68 O.S. 2021, Section 2803 , is
721		-	amended to read as follows:
722		-
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747		-
748		-	Section 2803. A. The Legislature, pursuant to autho rity of
749		-	Article X, Section 22 of the Oklahoma Constitution, hereby
750		-	classifies the following types of p roperty for purposes of ad
751		-	valorem taxation:
752		-	1. Real property;
753		-	2. Personal property, exce pt as provided in paragraph 3 of this
754		-	subsection;
755		-	3. Personal property which is household goods of the head of
756		-	families and livestock employed in support of the family in thos e
757		-	counties which have exempted such property pursuant to subsection
758		-	(b) of Section 6 of Article X of th e Oklahoma Constitution;
759		-	4. Public service corporation property; and
760		-	5. Railroad and air carrier property ; and
761		-	6. Rural internet service provider property if the rura l
762		-	internet service provider opts for local assessment by the
763		-	applicable county assessor pursuant to the provision s of this
764		-	paragraph. A rural internet service provider that files an election
765		-	with the county assessor of the county in w hich any real property or
766		-	personal property ow ned by such rural internet service pro vider is
767		-	located shall have real and personal property values for such
768		-	property established by the applicable county assessor and the
769		-	taxable value of such property shall be computed by the applicable
770		-	county assessor according to the same requirements as other real and
771		-	personal property. If an election is filed pursuant to this
772		-
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798		-	paragraph the election shall be filed not later than March 15 of any
799		-	calendar year and shall be in force and effect un til revoked by the
800		-	rural internet service provider. A rural i nternet service provider
801		-	that does not file an election pursuant to this paragraph or which
802		-	revokes an election as authorize d by this paragraph shall have its
803		-	real and personal property valued f or ad valorem tax purposes by the
804		-	State Board of Equalization in the same manner prescribed by law for
805		-	the valuation of publ ic service corporation property and the State
806		-	Board of Equalization shall compute the taxable value of such
807		-	property according to the same requirements as the property of
808		-	public service corporations. The Oklahoma Tax Commission shall
809		-	prescribe forms for the election and revocation of elections as
810		-	authorized by this paragraph .
811		-	B. Valuation of each class of subjects shall be made by a
812		-	method appropriate for each class or any subclass thereof, as
813		-	established by the Ad Valorem Division of the Oklahoma Tax
814		-	Commission.
815		-	C. Classification as provided by this section shall require
816		-	uniform treatment of each item within a class or any subclass as
817		-	provided in Article X, Section 5 of th e Oklahoma Constituti on.
818		-	SECTION 6. This act shall become effective January 1, 2025.
819		-
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845		-
846		-	Passed the House of Representatives the 7th day of March, 2024.
847		-
848		-
849		-
850		-
851		-	Presiding Officer of the House
852		-	of Representatives
853		-
854		-
855		-	Passed the Senate the ___ day of __________, 2024.
856		-
857		-
858		-
859		-
860		-	Presiding Officer of the Senate
861		-
862		-
863		-
	258	+	SECTION 3. This act shall become effective November 1, 2024.
	259	+	COMMITTEE REPORT BY: COMMITTEE ON FINANCE
	260	+	April 8, 2024 - DO PASS AS AMENDED BY CS