agricultural land; valuation

HB2814 - agricultural land; valuation

Agriculture Housing Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: David Livingston
Last action: 2026-01-22
Official status: House second read
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Valuation of Agricultural Land

This bill changes how agricultural land is valued for tax purposes in Arizona by requiring the use of an income approach that excludes urban or market influences.

What This Bill Does

Changes the way agricultural land is valued to only consider income from farming, not urban or market values.
Requires that the value of agricultural property be based on typical rental agreements over a five-year period before the valuation year.
Sets a specific interest rate for calculating the value of agricultural land, which is 1.5 percentage points higher than the average long-term annual effective interest rate for farm loans.

Who It Names or Affects

Farmers and other owners of agricultural land in Arizona
County assessors responsible for valuing property

Terms To Know

Income approach to value: A method used by appraisers to estimate the value of a property based on its income-generating potential.
Capitalized average annual net cash rental: The estimated yearly rental income from agricultural land, adjusted for interest rates and other factors.

Limits and Unknowns

Does not specify how the bill will be enforced or monitored.
It is unclear what happens if comparable rental agreements are unavailable in a specific area.

Bill History

2026-01-22 House
House second read
2026-01-21 House
House Rules: None
2026-01-21 House
House Ways & Means: None
2026-01-21 House
House first read

Official Summary Text

HB2814 - agricultural land; valuation

Current Bill Text

Read the full stored bill text

HB2814 - 572R - I Ver

REFERENCE TITLE:
agricultural land; valuation

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2814

Introduced by

Representative
Livingston

AN
ACT

amending section 42-13101, Arizona
Revised Statutes; relating to the valuation of agricultural property.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 42-13101, Arizona Revised
Statutes, is amended to read:

START_STATUTE
42-13101
.
Valuation of agricultural land

A. Land that is used for agricultural purposes shall
be valued using only the income approach to value without any allowance for
urban or market influences.

B. The income of agricultural
property

land
shall be determined using the capitalized average
annual net cash rental of the
property
agricultural
land
. For
the
purposes of this
subsection
,
the average annual net cash rental of the
property:

1. Is the average of the annual net cash rental,
excluding real estate and sales taxes, determined through an analysis of
typical arm's length rental agreements collected for a
five year
five-year
period before the year for which the valuation
is being determined for comparable agricultural land
that is
used
for agricultural purposes and located in the vicinity, if practicable, of the
property

agricultural land
being valued.

2. Shall be capitalized at a rate 1.5 percentage
points higher than the average long-term annual effective interest rate for all
new farm credit services loans for the
five year
five-year
period before the year for which the valuation
is being determined.

C. For the purposes of this section,
the county assessor shall exclude from the statutory valuation of agricultural
land the contributory value of depreciable improvements, including structures,
fixtures and permanent crops.� The county assessor shall identify and value
depreciable improvements, including structures, fixtures and permanent crops,
separately using standard appraisal methodologies and techniques.
END_STATUTE