SB1724 • 2026

property valuation; splits; subdivisions; consolidations

SB1724 - property valuation; splits; subdivisions; consolidations

Taxes

Passed Legislature

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

Sponsor: J.D. Mesnard
Last action: 2026-02-17
Official status: Senate minority caucus
Effective date: Not listed

Plain English Breakdown

The bill text distinguishes between owner-initiated and government-initiated actions, but does not provide examples of what constitutes each.

SB1724: Rules for Property Value When Land is Split or Combined

This bill limits when county assessors must recalculate property taxes after land splits, subdivisions, or consolidations to only cases that create a new unit usable and marketable on its own.

What This Bill Does

Requires a new tax value calculation for owner-initiated splits between January 1 and September 30 only if they create a new economic or functional unit that is independently usable and marketable.
States that the total tax value stays the same for owner-initiated splits, subdivisions, or consolidations happening after September 30, with changes taking effect in the next year unless a new independent unit is created.
Exempts property changes caused by government actions from some of these rules, often keeping values lower than standard market comparisons.
Defines specific terms like 'economic unit,' 'functional unit,' and 'independently usable' to help assessors decide when to change property values.

Who It Names or Affects

County assessors who calculate property values
Property owners whose land is split, subdivided, or consolidated by owner action

Terms To Know

Limited Property Value (LPV): The value used to calculate property taxes in Arizona.
Economic Unit: Real property that operates as a single income-producing or value-contributing entity, regardless of parcel numbers.
Functional Unit: Land used together for one main purpose, including parts needed to make the main use work and not functioning independently.
Independently Marketable: A piece of land that can be sold or leased separately in the open market without being just a small part of a neighbor's property.

Limits and Unknowns

The bill does not state the exact calendar date it becomes effective, only that it follows the general effective date.
It is unclear if this change will cause tax shifts that affect money in the state General Fund.
The text does not explain how assessors handle disputes over whether a new unit meets the definition of independently usable or marketable.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

SENATE - Finance (Adopted)

Adopted

Plain English: This amendment updates the rules for calculating property tax values when land is split, combined, or changed by clarifying how owner actions and government actions are treated differently.

It adds a rule that if an owner splits or combines their own property between January 1 and September 30, the new value will be set to match similar properties in the area immediately.
If an owner splits or combines property after September 30, the total tax value stays the same as before for that year, but it will adjust to match similar properties starting next year.
The amendment creates special rules where government-initiated land changes get a lower tax value calculation compared to actions started by private owners.

The provided text is cut off at the end, so the full details of how government-initiated splits are calculated after September 30 cannot be fully explained.
Some legal terms like 'limited property value' and specific references to other laws (like section 42-16002) are not defined in this text.

SENATE - Finance (Proposed)

Proposed

It adds a rule that if an owner splits or combines their own property between January 1 and September 30, the new value will be set to match similar properties in the area immediately.
If an owner splits or combines property after September 30, the total tax value stays the same as before for that year, but it will adjust to match similar properties starting next year.
The amendment creates special rules where government-initiated land changes get a lower tax value calculation compared to actions started by private owners.

The provided text is cut off at the end, so the full details of how limited property values are calculated for some specific cases cannot be explained.
Some parts of the amendment use technical legal terms like 'full cash value' and 'statutory valuation' that require looking up other laws to fully understand.

Bill History

2026-02-17 Senate
Senate minority caucus
2026-02-17 Senate
Senate majority caucus
2026-02-09 Senate
Senate second read
2026-02-05 Senate
Senate Rules: PFC
2026-02-05 Senate
Senate Finance: DPA
2026-02-05 Senate
Senate first read

Official Summary Text

SB1724 - 572R - Senate Fact Sheet

Assigned to
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PASSED BY COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

AMENDED

FACT SHEET FOR
S.b. 1724

property
valuation; splits; subdivisions; consolidations

Purpose

Limits the
circumstances that require a county assessor to reestablish a split, subdivided
or consolidated property's limited property value (LPV) to splits, subdivisions
and consolidations that create a new, independently usable and marketable
economic or functional unit.

Background

County assessors use Rule A and B to calculate a
property's LPV, which is used to calculate property tax. The Rule B calculation
sets the LPV at the level or percentage of the full cash value (FCV) that is
comparable to other properties of the same or similar use or classification.
Rule B is used to calculate a property's LPV in certain circumstances,
including when the property has been split, subdivided or consolidated from
January 1 through September 30 of the valuation year.

In the case of
property that is split, subdivided or consolidated after September 30 through
December 31 of the valuation year, except for cases that result from a
governmental entity-initiated action, the total LPV of the new parcel or
parcels is the same as the total LPV of the original parcel or parcels. For the
following valuation year, the LPV must be established at a level or percentage
of FCV that is comparable to that of other properties of the same or a similar
use or classification (
A.R.S.
� 42-13302
).

If limiting the
circumstances that require a county assessor to reestablish a split, subdivided
or consolidated property's LPV results in a tax shift that affects the
obligations of the state, there may be a fiscal impact to the state General
Fund.

Provisions

Clarifies the criteria to trigger a Rule B valuation for property that
has been split, subdivided or consolidated by specifying that the split,
subdivision or consolidation must be a result of a property owner initiated
action that constitutes a property split, subdivision or consolidation.

Specifies that a split, subdivision or consolidation does not require a
Rule B valuation unless it results in the creation of a new, independently
usable and marketable economic or functional unit.

Defines
economic unit
as real property that operates as a single
income-producing or value-contributing entity in the marketplace, regardless of
the number of parcel identifiers or ownership interests.

Defines
functional unit
as real property that operates together
as a single site for a primary use, including land or improvements that provide
a supporting, an incidental or a legally required utility for that use and do
not function independently from the primary use in terms of use, access or
operation.

Defines
independently marketable
as capable of being sold, leased
or otherwise transferred as a separate interest in real property in the open
market to a typical purchase or tenant, and not merely incidental or
subordinate to an adjacent property.

Defines
independently usable
as capable of being used, occupied
or developed for a permitted purpose without reliance on other real property
for legally required access, essential infrastructure or site function as
required by any law, ordinance or permit.

Makes technical and conforming changes.

Becomes effective on the general effective date.

Amendments Adopted by
Committee

�

Makes technical changes.

Senate Action

FIN� 2/9/26 �� DPA �� 4-1-2

Prepared by Senate Research

February 10, 2026

MG/hk

Current Bill Text

Read the full stored bill text

SB1724 - 572R - I Ver

REFERENCE TITLE:
property valuation; splits; subdivisions; consolidations

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1724

Introduced by

Senator
Mesnard

AN
ACT

amending section 42-13302, Arizona
Revised Statutes; relating to property valuation.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 42-13302, Arizona Revised
Statutes, is amended to read:

START_STATUTE
42-13302.

Determining limited value in cases of modifications, omissions,
changes and splits, subdivisions and consolidations; definitions

A. In the following circumstances the limited
property value shall be established at a level or percentage of full cash value
that is comparable to that of other properties of the same or a similar use or
classification:

1. Property that was erroneously totally or
partially omitted from the property tax rolls in the preceding tax year, except
as a result of this section.

2. Property for which a change in physical,
objectively verifiable use has occurred on the property since the preceding tax
year.� For the purposes of this paragraph and section 42-16002:

(a) A change in the occupant or classification of a
single-family residence is not a change in use, in and of itself.

(b) A change in the classification of a guest ranch
as defined in section 42-13551 is not a change in use, in and of itself.

3. Property that has been modified by construction,
destruction or demolition since the preceding valuation year such that the
total value of the modification is equal to or greater than fifteen percent of
the full cash value.

4. Property that has been split, subdivided or
consolidated
from January 1 through September 30 of the valuation
year, except for cases that result from an action initiated by a governmental
entity
as provided in subsections B and c of this section
.

5. Property that
previously qualified
for
was subject to
property valuation protection
under article IX, section 18, subsection (7), Constitution of Arizona, if title
to the property is conveyed to a person that does not qualify for property
valuation protection or the current owner of the property no longer qualifies
or did not reapply for property valuation protection.

6. Property that previously qualified for a
statutory valuation and no longer qualifies, unless otherwise provided in law.�
For the purposes of this paragraph, "statutory valuation" means a
specific formula for the calculation of full cash value prescribed in
this chapter or
chapter 12,
13,
15 or 19
of this title.

B. In the case of property that is
split, subdivided or consolidated after September 30 through December 31 of the
valuation year, except for cases that result from an action initiated by a
governmental entity, the total limited property value of the new parcel or
parcels is the same as the total limited property value of the original parcel
or parcels.� For the following valuation year, the limited property value shall
be established at a level or percentage of full cash value that is comparable
to that of other properties of the same or a similar use or
classification. The new parcel or parcels shall retain the same
value-adding characteristics that applied to the original parcel before
being split or consolidated, except as provided in subsection A,
paragraph 3 of this section.

C. In the case of property that was
split, subdivided or consolidated from January 1 through September 30 of the
valuation year as a result of an action initiated by a governmental entity, the
limited value is the lower of either:

1. The level or percentage of full
cash value that is comparable to that of other properties of the same or
similar use or classification.

2. The total limited value for the
original parcel or parcels as determined under section 42-13301, and in
the following valuation year, the limited property value shall be established
pursuant to section 42-13301.

D. In the case of property that was
split, subdivided or consolidated after September 30 through December 31 of the
valuation year as a result of an action initiated by a governmental entity, the
total limited value for the resulting parcel or parcels is the same as the
total limited value for the original parcel or parcels as determined under
section 42-13301, and in the following valuation year, the limited
property value shall be established as the lower of either:

1. The level or percentage of full
cash value that is comparable to that of other properties of the same or
similar use or classification.

2. The limited property value
established pursuant to section 42-13301.

B. For property that has been split,
subdivided or consolidated, the following apply:

1. If the split, subdivision or
consolidation occurs from January 1 through September 30 of the valuation year
as a result of an owner initiated action and not as a result of action
initiated by a governmental entity and that action constitutes a property
split, subdivision or consolidation, the limited property value shall be
established at a level or percentage of full cash value that is comparable to
that of other properties of the same or a similar use or classification.

2. If the split, subdivision or
consolidation occurred after September 30 through December 31 of the valuation
year as a result of an owner initiated action and not as a result of action
initiated by a governmental entity and that action constitutes a property
split, subdivision or consolidation, the total limited property value of the
new parcel or parcels is the same as the total limited property value of the
original parcel or parcels. For the following valuation year, the
limited property value shall be established at a level or percentage of full
cash value that is comparable to that of other properties of the same or a
similar use or classification.

3. If the split, subdivision or
consolidation occurred from January 1 through September 30 of the valuation
year as a result of action initiated by a governmental entity, the limited
property value is the lower of either:

(
a
) The level
or percentage of full cash value that is comparable to that of other properties
of the same or similar use or classification.

(
b
) The total
limited property value for the original parcel or parcels as determined under
section 42-13301, and in the following valuation year, the limited
property value shall be established pursuant to section 42-13301.

4. If the split, subdivision or
consolidation occurred after September 30 through December 31 of the valuation
year, the total limited property value for the resulting parcel or parcels is
the same as the total limited property value for the original parcel or parcels
as determined under section 42-13301. For the following valuation year,
the limited property value shall be established as the lower of either:

(
a
) The level
or percentage of full cash value that is comparable to that of other properties
of the same or similar use or classification.

(
b
) The limited
property value established pursuant to section 42-13301.

C. For the purposes of this section,
a split, subdivision or consolidation does not require a reestablishment of
limited property value unless it results in the creation of a new,
independently usable and independently marketable economic unit or functional
unit.

D. For the purposes of this section:

1. "Economic
unit" means real property that operates as a single income-producing
or value-contributing entity in the marketplace, regardless of the number of
parcel identifiers or ownership interests.

2. "Functional
unit" means real property that operates together as a single site for a
primary use, including land or improvements that provide a supporting, an
incidental or a legally required utility for that use and do not function
independently from the primary use in terms of use, access or operation.

3. "Independently
marketable" means capable of being sold, leased or otherwise transferred
as a separate interest in real property in the open market to a typical
purchaser or tenant, and not merely incidental or subordinate to an adjacent
property.

4. "Independently
usable" means capable of being used, occupied or developed for a permitted
purpose without reliance on other real property for legally required access,
essential infrastructure or site function as required by any law, ordinance or
permit.
END_STATUTE