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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
HOUSE BILL 1890 By: May
AS INTRODUCED
An Act relating to revenue and taxation; amending 68
O.S. 2021, Sections 2802, 2821, 2823, 2906, and 2907,
which relate to ad valorem tax code, definitions,
inspections, and exemptions; modifying definition to
exclude requirement for physical examination of
property; modifying recording process to exclude
physical inspection; modifying income cap; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 2802, is
amended to read as follows:
Section 2802. Definitions.
As used in Section 2801 et seq. of this title:
1. "Accepted standards for mass appraisal practice" means those
standards for the collection and analysis of information about
taxable properties within a taxing jurisdiction permitting the
accurate estimate of fair cash value for similar properties in the
jurisdiction either without direct observation of such similar
properties or without direct sales price information 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 assessor and, unless the context
clearly requires otherwise, deputy assessors and persons employed by
the county assessor in performance of duties imposed by law;
4. "Assess and value" means to establish the fair cash value
and taxable fair cash value of taxable 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 property, 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 items of personal property,
parcels of real property or the aggregate total of such individual
taxable items or parcels within a jurisdiction;
6. "Assessment percentage" means the percentage applied to
personal property and real property pursuant to Section 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 or 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 noncomputerized
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 following
January 1 assessment date;
10. "Circuit breaker" means the form of property tax 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 the 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 construction
cost of improvements, subtracting accrued depreciation including any
loss in value that may be caused by physical deterioration,
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functional obsolescence or economic obsolescence and adding the
value of the land.
a. Physical deterioration is a cause of depreciation 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 resulting 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 result of
impairment in utility and desirability 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 respective county to conform to fair
cash value and such other responsibilities as prescribed in Section
2801 et seq. of this title;
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 county 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 values 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 property 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 the 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 taxable
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 imposed upon
taxable value. One (1) mill equals 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 the 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 one of a
number of lots on a plat or plan, separately owned and capable of
being separately conveyed;
26. "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. "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;
28. "Taxable value" means the percentage of the fair cash value
of personal property or the taxable fair cash value of real
property, less applicable exemptions, 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;
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29. "Taxable fair cash value" means the fair cash value of
locally assessed real property as capped pursuant to Section 8B of
Article X of the Oklahoma Constitution;
30. "Use category" means a subcategory of real property, that
is either agricultural use, residential 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. "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 Constitution; and
32. "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 least once each four (4) years
and the fair cash values of similar properties on an annual basis.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 2821, is
amended to read as follows:
Section 2821. Physical inspection of real property - Type of
information to be gathered - Recording - Cadastral maps and parcel
identification system to be required and maintained - Comprehensive
sales file - Office equipment.
A. Each county assessor shall cause real property to be
physically inspected as part of the visual inspection cycle and
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shall require such examination as will provide adequate data from
which to make accurate valuations.
B. The information gathered from the physical inspection shall
be relevant to the type of property involved, its use category, the
valuation methodology to be used for the property, whether the
methodology consists of the cost approach, an income and expense
approach or sales comparison approach, and shall be complete enough
in order to establish the fair cash value of the property in
accordance with accepted standards for mass appraisal practice.
C. Information gathered during the physical inspection shall be
recorded using a standard method as prescribed by the Oklahoma Tax
Commission in computerized or noncomputerized form. The information
may include property ownership, location, size, use, use category, a
physical description of the land and improvements or such other
information as may be required.
D. In order to conduct the visual inspections of real property
during the four-year cycle, each county assessor shall acquire and
maintain cadastral maps and a parcel identification system. The
standards for the cadastral maps and the parcel identification
system shall be uniform for each county of the state and shall be in
such form as developed by the Ad Valorem Task Force.
E. The county assessor shall maintain a comprehensive sales
file for each parcel of real property within the county containing
relevant property characteristics, sales price information,
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adjustments to sales price for purposes of cash equivalency,
transaction terms and such other information as may be required in
order to establish the fair cash value of taxable real property.
Each county assessor shall ensure that the office is equipped
with adequate drafting facilities, tools, equipment and supplies in
order to produce or update maps, sketches or drawings necessary to
support the proper administration of the ad valorem tax and such
other tools or equipment as may be required to perform duties
imposed by law for the discovery and valuation of taxable property.
SECTION 3. AMENDATORY 68 O.S. 2021, Section 2823, is
amended to read as follows:
Section 2823. Cost of comprehensive visual inspection program.
A. For each fiscal year, the cost of the comprehensive program
of visual inspections for real property and the cost of physical
inspections of personal property shall be paid by appropriate
warrants from those who receive the revenues of the mill rates
levied on the property of the county as prescribed by this section.
School districts are hereby authorized to pay such costs from
revenues accruing to their building funds. The county assessor
shall prepare a budget for the comprehensive program of visual
inspections for real property and the cost of physical inspections
of personal property and file such budget with the county excise
board or county budget board.
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B. The county excise board or county budget board shall
apportion such cost among the various recipients of revenues from
the mill rates levied, including the county, all cities and towns,
all school districts, all sinking funds of such recipients, and all
jurisdictions specified in subsection D of this section, in the
ratio which each recipient's total tax collection authorized from
its mill rates levied for the preceding year bears to the total tax
collection authorized of all recipients from all their mill rates
levied for the preceding year. The cost shall include only those
expenses directly attributable to the visual inspection program and
those expenses directly attributable to physical onsite inspections
of personal property and shall not include any expenses of the
office of the county assessor which, in the judgment of the county
excise board or county budget board, are expenses of county
assessor's office which would exist in the absence of such program
or in the absence of physical onsite inspection of personal
property. Expenses that are attributable both to the visual
inspection program and physical inspection of personal property, and
which would exist in the absence of such program or inspection,
including but not limited to salaries, employee benefits, office
supplies and equipment, may be prorated; provided, no portion of the
salary of the county assessor shall be included in such costs.
C. Upon receipt of the billing statement provided for in
subsections D and E of this section by each such recipient, the mill
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rates to be established by the board for each such recipient for the
current year shall include and be based upon such amounts and shall
constitute an appropriation of such amounts to the county assessor
for expenditure for the expenses of administering the visual
inspection program each year. In the case of a sinking fund of a
recipient, if, after approving its budget, the governing body of a
recipient notifies the board in writing that there are no funds
appropriated to pay the amount of the billing statement for such
sinking fund, such notice shall constitute conclusive evidence of a
financial obligation of the recipient as it relates to such sinking
fund. The board may seek a judgment for the amount of such
obligation and court costs in the district court of the county in
which the board is located.
D. The county assessor shall render a statement to each of the
jurisdictions within the county which receive revenue from an ad
valorem mill rate. Such statement shall include the following
information:
1. The current fiscal year in which the charge has been
incorporated in the jurisdiction's budget;
2. All jurisdictions receiving statements from the county
assessor, the mill rate for each in the previous year, and the
proportion of each to the combined mill rates of all jurisdictions
within the county for the previous year. The proportions specified
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in this paragraph should equal a total of one hundred percent
(100%);
3. The charge for the entity receiving the statement as well as
the charge for each jurisdiction of the county based upon the
proportions specified in paragraph 2 of this subsection. The total
of all current year charges for all county jurisdictions should
equal the total visual inspection program budget for the current
fiscal year;
4. The amount of the total budget for the office of the county
assessor and the percentage that visual inspection program expenses
are of such total budget; and
5. A copy of the County Budget Visual Inspection Account and a
brief description of the areas to be visually inspected for the
current fiscal year, consistent with the plan on file with the
Oklahoma Tax Commission pursuant to Section 2820 of this title.
E. In any county wherein any jurisdiction's budget and mill
rates are not subject to review and approval by the county excise
board, the county assessor shall nevertheless include any such
jurisdiction in the calculations required under subsection A of this
section. The county assessor shall also render a billing statement
to any such jurisdiction showing the charge for the current fiscal
year due from the jurisdiction. Such billing statement shall also
show all the information specified in subsection D of this section.
Such billing statement shall clearly indicate that the charge
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payable by the jurisdiction is due and payable by December 31 of the
current fiscal year.
SECTION 4. AMENDATORY 68 O.S. 2021, Section 2906, is
amended to read as follows:
Section 2906. Any person sixty-five (65) years of age or older
or any totally disabled person, who is the head of a household, a
resident of and domiciled in this state during the entire preceding
calendar year, and whose gross household income for such year does
not exceed Twelve Thousand Dollars ($12,000.00) Thirty Thousand
Dollars ($30,000.00) may file a claim for property tax relief on the
amount of property taxes paid on the household occupied by such
person during the preceding calendar year. Each head of household
shall be allowed to file only one claim per year.
SECTION 5. AMENDATORY 68 O.S. 2021, Section 2907, is
amended to read as follows:
Section 2907. A. The amount of any claim filed pursuant to
Section 108 of this act shall be for the amount of the property
taxes paid by the claimant for the preceding calendar year which
exceeds one percent (1%) of the household income, but no claim for
property tax relief shall exceed Two Hundred Dollars ($200.00) One
Thousand Dollars ($1,000.00).
B. The right to file a claim and to receive property tax relief
under the provisions of this act shall be personal to the claimant
and shall not survive his death, except that a surviving spouse of
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the claimant may receive benefits hereunder upon the timely filing
of a claim.
SECTION 6. This act shall become effective November 1, 2025.
60-1-12150 AO 01/02/25