1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 HOUSE BILL 3961 By: Echols
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6 AS INTRODUCED
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7 An Act relating to revenue and taxation; amending 68
7 O.S. 2021, Section 2802, which relates to definitions
8 used in the Ad Valorem Tax Code; providing definition
8 of rural internet service provider; amending 68 O.S.
9 2021, Section 2803, which relates to classification
9 of subjects for purposes of ad valorem taxation;
10 providing classification of certain rural internet
10 service providers; prescribing requirements for
11 valuation and determination of taxable values;
11 prescribing procedures for election and revocation of
12 election; and providing an effective date.
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15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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16 SECTION 1. AMENDATORY 68 O.S. 2021, Section 2802, is
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17 amended to read as follows:
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18 Section 2802. As used in Section 2801 et seq. of this title:
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19 1. "Accepted standards for mass appraisal practice" means those
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20 standards for the collection and analysis of information about
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21 taxable properties within a taxing jurisdiction permitting the
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22 accurate estimate of fair cash value for similar properties in the
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23 jurisdiction either without direct observation of such similar
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24 properties or without direct sales price information for such
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 1 similar properties using a reliable statistical or other method to
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2 estimate the values of such properties;
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3 2. "Additional homestead exemption" means the exemption
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4 provided by Section 2890 of this title;
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5 3. "Assessor" means the county assessor and, unless the context
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6 clearly requires otherwise, deputy assessors and persons employed by
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7 the county assessor in performance of duties imposed by law;
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8 4. "Assess and value" means to establish the fair cash value
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9 and taxable fair cash value of taxable real and personal property
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10 pursuant to requirements of law;
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11 5. "Assessed valuation" or "assessed value" means the
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12 percentage of the fair cash value of personal property, or the
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13 percentage of the taxable fair cash value of real property, pursuant
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14 to the provisions of Sections 8 and 8B of Article X of the Oklahoma
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15 Constitution, either of individual items of personal property,
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16 parcels of real property or the aggregate total of such individual
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17 taxable items or parcels within a jurisdiction;
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18 6. "Assessment percentage" means the percentage applied to
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19 personal property and real property pursuant to Section 8 of Article
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20 X of the Oklahoma Constitution;
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21 7. "Assessment ratio" means the relationship between assessed
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22 value and taxable fair cash value for a county or for use categories
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23 within a county expressed as a percentage determined in the annual
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24 equalization ratio study;
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 1 8. "Assessment roll" means a computerized or noncomputerized
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2 record required by law to be kept by the county assessor and
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3 containing information about property within a taxing jurisdiction;
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4 9. "Assessment year" means the year beginning January 1 of each
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5 calendar year and ending on December 31 preceding the following
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6 January 1 assessment date;
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7 10. "Circuit breaker" means the form of property tax relief
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8 provided by Sections 2904 through 2911 of this title;
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9 11. "Class of subjects" means a category of property
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10 specifically designated pursuant to provisions of the Oklahoma
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11 Constitution for purposes of ad valorem taxation;
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12 12. "Code" means the Ad Valorem Tax Code, Section 2801 et seq.
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13 of this title;
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14 13. "Coefficient of dispersion" means a statistical measure of
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15 assessment uniformity for a category of property or for all property
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16 within a taxing jurisdiction;
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17 14. "Confidence level" means a statistical procedure for
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18 determining the degree of reliability for use in reporting the
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19 assessment ratio for a taxing jurisdiction;
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20 15. "Cost approach" means a method used to establish the fair
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21 cash value of property involving an estimate of current construction
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22 cost of improvements, subtracting accrued depreciation including any
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23 loss in value that may be caused by physical deterioration,
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 1 functional obsolescence or economic obsolescence and adding the
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2 value of the land.
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3 a. Physical deterioration is a cause of depreciation that
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4 is a loss in value due to ordinary wear and tear and
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5 the forces of nature.
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6 b. Functional or internal obsolescence is the loss in
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7 value of a property resulting from changes in tastes,
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8 preferences, technical innovations or market
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9 standards.
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10 c. Economic or external obsolescence is a cause of
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11 depreciation that is a loss in value as a result of
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12 impairment in utility and desirability caused by
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13 factors outside the boundaries of the property or loss
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14 of value in a property (relative to the cost of
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15 replacing it with a property of equal utility) that
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16 stems from factors external to the property;
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17 16. "County board of equalization" means the board which, upon
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18 hearing competent evidence, has the authority to correct and adjust
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19 the assessment rolls in its respective county to conform to fair
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20 cash value and such other responsibilities as prescribed in Section
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21 2801 et seq. of this title;
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22 17. "Equalization" means the process for making adjustments to
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23 taxable property values within a county by analyzing the
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24 relationships between assessed values and fair cash values in one or
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 1 more use categories within the county or between counties by
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2 analyzing the relationship between assessed value and fair cash
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3 value in each county;
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4 18. "Equalization ratio study" means the analysis of the
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5 relationships between assessed values and fair cash values in the
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6 manner provided by law;
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7 19. "Fair cash value" or "market value" means the value or
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8 price at which a willing buyer would purchase property and a willing
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9 seller would sell property if both parties are knowledgeable about
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10 the property and its uses and if neither party is under any undue
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11 pressure to buy or sell and for real property shall mean the value
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12 for the highest and best use for which such property was actually
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13 used, or was previously classified for use, during the calendar year
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14 next preceding the applicable January 1 assessment date;
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15 20. "Homestead exemption" means the reduction in the taxable
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16 value of a homestead as authorized by law;
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17 21. "Income and expense approach" means a method to estimate
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18 fair cash value of a property by determining the present value of
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19 the projected income stream;
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20 22. "List and assess" means the process by which taxable
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21 property is discovered, its description recorded for purposes of ad
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22 valorem taxation and its fair cash value and taxable fair cash value
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23 are established;
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 1 23. "Mill" or "millage" means the rate of tax imposed upon
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2 taxable value. One (1) mill equals One Dollar ($1.00) of tax for
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3 each One Thousand Dollars ($1,000.00) of taxable value;
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4 24. "Multiple regression analysis" means a statistical
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5 technique for estimating unknown data on the basis of known and
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6 available data;
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7 25. "Parcel" means a contiguous area of land described in a
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8 single description by a deed or other instrument or as one of a
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9 number of lots on a plat or plan, separately owned and capable of
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10 being separately conveyed;
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11 26. "Rural internet service provider" means a lawfully
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12 recognized business entity offering internet services on a
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13 subscription basis if the majority of the subscribers reside in a
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14 rural census tract as defined pursuant to the laws governing the
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15 preparation of the United States Census;
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16 27. "Sales comparison approach" means the collection,
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17 verification, and screening of sales data, stratification of sales
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18 information for purposes of comparison and use of such information
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19 to establish the fair cash value of taxable property;
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20 27. 28. "State Board of Equalization" means the Board
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21 responsible for valuation of railroad, airline and public service
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22 corporation property and the adjustment and equalization of all
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23 property values both centrally and locally assessed;
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 1 28. 29. "Taxable value" means the percentage of the fair cash
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2 value of personal property or the taxable fair cash value of real
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3 property, less applicable exemptions, upon which an ad valorem tax
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4 rate is levied pursuant to the provisions of Section 8 and Section
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5 8B of Article X of the Oklahoma Constitution;
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6 29. 30. "Taxable fair cash value" means the fair cash value of
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7 locally assessed real property as capped pursuant to Section 8B of
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8 Article X of the Oklahoma Constitution;
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9 30. 31. "Use category" means a subcategory of real property,
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10 that is either agricultural use, residential use or
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11 commercial/industrial use but does not and shall not constitute a
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12 class of subjects within the meaning of the Oklahoma Constitution
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13 for purposes of ad valorem taxation;
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14 31. 32. "Use value" means the basis for establishing fair cash
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15 value of real property pursuant to the requirement of Section 8 of
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16 Article X of the Oklahoma Constitution; and
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17 32. 33. "Visual inspection program" means the program required
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18 in order to gather data about real property from physical
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19 examination of the property and improvements in order to establish
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20 the fair cash values of properties so inspected at least once each
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21 four (4) years and the fair cash values of similar properties on an
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22 annual basis.
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23 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2803, is
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24 amended to read as follows:
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 1 Section 2803. A. The Legislature, pursuant to authority of
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2 Article X, Section 22 of the Oklahoma Constitution, hereby
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3 classifies the following types of property for purposes of ad
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4 valorem taxation:
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5 1. Real property;
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6 2. Personal property, except as provided in paragraph 3 of this
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7 subsection;
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8 3. Personal property which is household goods of the head of
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9 families and livestock employed in support of the family in those
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10 counties which have exempted such property pursuant to subsection
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11 (b) of Section 6 of Article X of the Oklahoma Constitution;
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12 4. Public service corporation property; and
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13 5. Railroad and air carrier property; and
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14 6. Rural internet service provider property if the rural
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15 internet service provider opts for local assessment by the
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16 applicable county assessor pursuant to the provisions of this
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17 paragraph. A rural internet service provider that files an election
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18 with the county assessor of the county in which any real property or
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19 personal property owned by such rural internet service provider is
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20 located shall have real and personal property values for such
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21 property established by the applicable county assessor and the
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22 taxable value of such property shall be computed by the applicable
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23 county assessor according to the same requirements as other real and
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24 personal property. If an election is filed pursuant to this
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 1 paragraph the election shall be filed not later than March 15 of any
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2 calendar year and shall be in force and effect until revoked by the
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3 rural internet service provider. A rural internet service provider
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4 that does not file an election pursuant to this paragraph or which
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5 revokes an election as authorized by this paragraph shall have its
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6 real and personal property valued for ad valorem tax purposes by the
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7 State Board of Equalization in the same manner prescribed by law for
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8 the valuation of public service corporation property and the State
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9 Board of Equalization shall compute the taxable value of such
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10 property according to the same requirements as the property of
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11 public service corporations. The Oklahoma Tax Commission shall
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12 prescribe forms for the election and revocation of elections as
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13 authorized by this paragraph.
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14 B. Valuation of each class of subjects shall be made by a
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15 method appropriate for each class or any subclass thereof, as
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16 established by the Ad Valorem Division of the Oklahoma Tax
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17 Commission.
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18 C. Classification as provided by this section shall require
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19 uniform treatment of each item within a class or any subclass as
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20 provided in Article X, Section 5 of the Oklahoma Constitution.
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21 SECTION 3. This act shall become effective January 1, 2025.
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23 59-2-8444 MAH 01/01/24
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