HB2104

Official summary

HB2104 - 572R - Senate Fact Sheet Assigned to FIN����������������� ���������������������������������������������������������������������������������������������� AS PASSED BY COW ARIZONA STATE SENATE Fifty-Seventh Legislature, Second Regular Session AMENDED FACT SHEET FOR H.B. 2104 agricultural property; classifications; inspection Purpose Prohibits a county assessor from reclassifying or conducting an on-site inspection of agricultural property for three years after a property owner prevails in a property tax appeal, unless there is a change in use or ownership, a property split or a taxable improvement and allows a county assessor, during the three-year exemption period, to assess the applicable property tax on a previously unreported taxable improvement if the county assessor classifies the improvement as agricultural property. Background Statute requires each county assessor to conduct on-site inspections of 25 percent of agricultural properties each year, ensuring that every agricultural property is reviewed and appraised at least once every four years. If, during inspection, a property is found not to qualify for agricultural property tax classification, the owner must be notified by certified mail of the reason for reclassifying the property and include information for the property owner to appeal the reclassification (A.R.S. �� 42-12158 and 42-12156 ). A county assessor must notify a property owner whether an agricultural classification has been approved or disapproved by the time the assessor next mails the property's notice of valuation. If the agricultural classification is disapproved, the assessor must notify the owner of the reason for disapproval within 120 days of the application and the owner may appeal the decision of the assessor ( A.R.S. � 42-12155 ). A person that disagrees with the valuation or legal classification of the person's real property may file a petition with the county assessor appealing the county assessor's noticed valuation or recommended classification of the property. If the county assessor denies a petition and if a county board of equalization has been established in the county, the petitioner may appeal the assessor's decision to the county board within 25 days after the assessor's decision was mailed to the petitioner. In evaluating the petition, the county board must either grant or refuse the request of the petitioner within 10 days after a hearing on the petition has been held. If the county board of supervisors makes any changes to valuations or legal classifications ordered by the county board, the county board of supervisors must add up on the roll the entries of the valuation of each description and class of property and the total valuations and enter all totals on the tax roll. A property owner who is dissatisfied with the valuation or classification of the property as determined by a county board or a petitioner whose petition is denied by the county board may appeal directly to the court within 60 days after the date of mailing of the decision or by December 15, whichever is later. If the county board orders the valuation of any property to be reduced, the county assessor or the Arizona Department of Revenue may appeal the decision to court ( A.R.S. Title 42, Chapter 16, Article 3 ). There is no anticipated fiscal impact to the state General Fund associated with this legislation. Provisions 1. Prohibits, if a property owner prevails in a property tax appeal, a county assessor from conducting an on-site inspection or reclassifying agricultural property for three years after the year in which the appeal decision is rendered, unless one of the following occurs: a) the property owner files a change in use notice; b) a split of the property; c) a change in ownership or lease of the property; or d) a taxable improvement is made to the property. 2. Allows a county assessor, if the assessor classifies a previously unreported improvement as agricultural property during the three-year exemption period, to assess the applicable property tax on the improvement for the current tax year and any prior year the improvement existed. 3. Becomes effective on the general effective date. Amendments Adopted by Committee 1. Allows a county assessor, if the assessor classifies a previously unreported improvement as agricultural property during the four-year exemption period, to assess the applicable property tax on the improvement for the current tax year and any prior year the improvement existed. Amendments Adopted by Committee of the Whole 1. Reduces, from four years to three years, the period during which a county assessor is prohibited from conducting an on-site inspection or reclassifying agricultural property after a property owner prevails in a property tax appeal, unless there is a change in use, a change in ownership, a property split or a taxable improvement. 2. Makes conforming changes. House Action ���������������������������������������������������������� Senate Action WM���������������� 1/21/26����� DP������ 5-4-0-0�������������� FIN ���������� 3/16/26�������� DPA������� 4-3-0� 3 rd Read��������� 2/24/26����������������� 36-20-4�������������� Prepared by Senate Research June 9, 2026 MG/hk