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ENGROSSED SENATE AMENDMENT
TO
ENGROSSED HOUSE
BILL NO. 3961 By: Echols of the House
and
Hall of the Senate
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 280 2, which relates to definitions
used in the Ad Valorem Tax Code ; 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; prescribi ng requirements for
valuation and determination of taxable values;
prescribing procedures for election and revocation of
election; and providing an effective date .
AMENDMENT NO. 1. Page 1, strike the title, enacting clause and
entire bill and insert
“[ ad valorem tax - centrally assessed property -
broadband service providers - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2808, is
amended to read as fo llows:
Section 2808. A. As used in the Ad Valorem Tax Code:
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1. “Public service corporation” means all transportation
companies, transmission companies, all gas, electric, light, heat ,
and power companies, and all waterworks and water power companies,
and all persons authorized to exercise the right of eminent domain
or to use or occupy any right -of-way, street, alley, or public
highway, along, over , or under the same in a manner not permitted to
the general public;
2. “Transportation company” means any company, corporation,
trustee, receiver, or any other person owning, leasing , or operating
for hire, a street railway, canal, steamboat line, and also any
sleeping car company, parlor car company , and express company, and
any other company, trustee, or per son in any way engaged in such
business as a common carrier. As used in the Ad Valorem Tax Code,
the term “transportation company” transportation company shall not
include any railroad or any air carrier. However, all railroad and
air carrier property sh all continue to be valued and assessed by the
State Board of Equalization for purposes of ad valorem taxation;
3. “Transmission company” means any company, corporation,
trustee, receiver, or other person owning, leasing , or operating for
hire any telegraph or telephone line or radio broadcasting system;
4. “Person” means individuals, partnerships, associations, and
corporations in the singular as well as plural number;
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5. “Video services provider” means a subclass of public service
corporations consistin g of any public service corporation offering
video programming services;
6. “Video programming” shall have the same meaning as set forth
in 47 U.S.C., Section 522(20); and
7. “Fixed wireless broadband Internet service provider” means
an entity that solel y offers access to the Internet through a
stationary fixed point -to-point connection often requiring direct
line of sight between the provider’s wireless transmitter and its
end-user consumer’s receiver ; and
8. “Broadband service providers” means a subcla ss of public
service corporations consisting of any public service corporation
offering broadband-based services including Internet access, Voice
over Internet Protocol, or Internet Protocol television to end -user
consumers. For the purposes of this parag raph, “broadband” means
wired internet at speeds in excess of one hundred megabits per
second (100 Mbps) for download and twenty megabits per second (20
Mbps) for upload.
B. As used in the Ad Valorem Tax Code, “transmission company”
transmission company and “public service corporation” public service
corporation shall not be construed to include cable television
companies or fixed wireless broadband Internet service providers.
C. Any real or personal property used by any company,
corporation, trustee, rec eiver, or other person owning, leasing, or
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operating for hire any pipeline or oil or gas gathering system which
was assessed by the State Board of Equalization after January 1,
1997, shall continue to be assessed by the State Board of
Equalization through ad valorem tax year 1998.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2847, is
amended to read as follows:
Section 2847. A. The property of all railroads, air carriers ,
and public service corporations shall be assessed annually by the
State Board of Equalization at its fair cash value estimated at the
price it would bring at a fair voluntary sale.
B. Taxable values of real and personal property of all
railroads, air carriers , and public service corporations shall be
established in accordance with the requirements of Section 8 of
Article X of the Oklahoma Constitution. The State Board of
Equalization shall determine the taxable value of all taxable
property that the Board is required by law to assess and value, and
shall determine such taxable value in accordance with the
requirements of Section 8 of Article X of the Oklahoma Constitution.
C. The State Board of Equalization shall assess the property of
that subclass of public service corporations known as video services
providers, as defined in Section 2808 of this title, as provided:
1. Every video services provider shall file with the State
Board of Equalization a certification regarding total gross receipts
for the immediate preceding calendar year by April 15 and shall
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specify the total gross receipts derived from video programming
services;
2. The State Board of Equalization shall determine the
percentage of gross receipts the video services provider has derived
from video programming in the immediately preceding calendar ye ar;
and
3. The percentage determined pursuant to paragraph 2 of this
subsection shall be applied to the taxable fair cash value allocated
to Oklahoma this state, and the resulting fair cash value
attributable to video programming services shall be assesse d using
the statewide average of the assessment ratios applied to the assets
of cable television companies in that tax year. Unless the taxpayer
or the State Board of Equalization demonstrates otherwise, the
statewide average assessment ratio applied to t he personal property
of a cable television company shall be assumed to be twelve percent
(12%).
D. The percentage of fair cash value for real and personal
property of railroads, air carriers , and public service corporations
required by the Oklahoma Consti tution to be taxable shall be the
percentage at which it was assessed on January 1, 1996, in
accordance with the provisions of paragraph 3 of subsection A of
Section 8 of Article X of the Oklahoma Constitution, and, subject to
the requirements of federal l aw, shall be uniformly applied to
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calculate the taxable values of public service corporation property
within the state for the applicable assessment year.
E. The State Board of Equalization shall assess the property
used to provide wired broadband service that is constructed or
installed and placed in service after the effective date of this
act, in an area where the coverage for wired internet at speeds in
excess of one hundred megabits per second (100 Mbps) for download
and twenty megabits per second (20 Mbps) for upload is equal to or
less than fifty percent (50%) according to the most recent FCC
National Broadband Map published by the Federal Communications
Commission at the time the property is constructed or installed and
placed in service, of that su bclass of public service corporations
known as broadband service providers, as defined in Section 2808 of
this title, at a ratio of fifteen percent (15%) for the year 2025
and subsequent years. Provided, the property assessed pursuant to
this subsection shall only include property exclusively used to
provide broadband internet service to areas meeting the coverage
requirements as provided in this subsection including fiber, cable,
transmission lines, fiber support infrastructure, cable support
infrastructure, transmission line support infrastructure, network
infrastructure, and facilities used to contain network
infrastructure. The valuation of all assets shall be calculated on
a net book basis to each assessment rate as provided in this
subsection and subsection D of this section. The Oklahoma Tax
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Commission may promulgate rules to effectuate the provisions of this
subsection.
SECTION 3. This act shall become effective January 1, 202 5.”
Passed the Senate the 25th day of April, 2024.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2024.
Presiding Officer of the House
of Representatives
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ENGROSSED HOUSE
BILL NO. 3961 By: Echols of the House
and
Hall of the Senate
An Act relating to revenue and taxation; amending 6 8
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 4. AMENDATORY 68 O.S. 2021, Section 2802, is
amended to read as follows:
Section 2802. As used in Section 2801 et seq. of this title:
1. "Accepted standards fo r 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 p roperties in the
jurisdiction either with out 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 performan ce 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 proper ty, 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 tot al 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 noncompute rized
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 fo llowing
January 1 assessment date;
10. "Circuit breaker" means the form of property t ax 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 th e 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, subtracting accrued depreciation including any
loss in value that may b e caused by physical deterioration ,
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functional obsolescence or economic obs olescence 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 resul ting 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 res ult of
impairment in utility and d esirability 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 r espective county to conform to fair
cash value and such other responsibi lities as prescribed in Section
2801 et seq. of this titl e;
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
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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 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 th e 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 ta xable
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;
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23. "Mill" or "millage" means the rate of tax impose d upon
taxable value. One (1) mill equal s 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 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 or 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 comparison 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 equalization 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, residen tial use or
commercial/industrial use but does not and shall not constitute a
class of subjects within the meaning of the Oklahoma 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 5. 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 Oklahoma 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 the 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 rura l
internet service provider opts for local assessment by the
applicable county assessor pursuant to the provision s of this
paragraph. A rural internet service provider 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 un til revoked 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 f or ad valorem tax purposes by the
State Board of Equalization 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 by this section shall require
uniform treatment of each item within a class or any subclass as
provided in Article X, Section 5 of th e Oklahoma Constituti on.
SECTION 6. This act shall become effective January 1, 2025.
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Passed the House of Representatives the 7th day of March, 2024.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2024.
Presiding Officer of the Senate