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ENGROSSED SENATE
BILL NO. 2143 By: Alvord of the Senate
and
Lepak of the House
An Act relating to ad valorem tax; amending 68 O.S.
2021, Sections 2802 and 2821, which relate to
definitions and physical inspection of real property;
modifying definition; defining term; authorizing the
use digital visual technology for inspection of real
property; updating statutory language; 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. As used in Section 2801 et seq. of this title:
1. “Accepted standards for mass appraisal practice” means those
the standards on mass appraisal of real property, as maintained by
the International Association of Assessing Officers, 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 similar properties using a
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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, not to include developer costs at the time of
construction, subtracting accrued depreciation including any loss in
value that may be caused by physical deterioration, functional
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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, relative to the cost
of replacing it with a property of equal utility),
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
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relationships between assessed values and fair cash values in one or
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. “Fixed-wing aircraft” means a manned flying machine,
commonly known as an airplane, that generates lift through the
forward motion of the aircraft and wings that do not revolve around
a mast, but are fixed in relation to the fuselage of the aircraft.
Fixed-wing aircraft shall also comply with Federal Aviation
Administration regulations. For the purposes of this paragraph,
fixed-wing aircraft shall not include unmanned aircraft as defined
in Section 322 of Title 3 of the Oklahoma Statutes;
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21. “Homestead exemption” means the reduction in the taxable
value of a homestead as authorized by law;
21. 22. “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. 23. “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;
23. 24. “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. 25. “Multiple regression analysis” means a statistical
technique for estimating unknown data on the basis of known and
available data;
25. 26. “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. 27. “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;
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27. 28. “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. 29. “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;
29. 30. “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. 31. “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. 32. “Use value” means the basis for establishing fair cash
value of real property pursuant to the requirement requirements of
Section 8 of Article X of the Oklahoma Constitution; and
32. 33. “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
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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. A. Each county assessor shall cause real
property to be physically inspected as part of the visual inspection
cycle and shall require such examination as will provide adequate
data from which to make accurate valuations. Changes to property
may be discovered with the use of digital visual technology on
aerial images taken by fixed-wing aircraft complying with Federal
Aviation Administration regulations or satellite.
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.
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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 Division of the
Oklahoma Tax Commission.
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,
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. This act shall become effective November 1, 2026.
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Passed the Senate the 23rd day of February, 2026.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2026.
Presiding Officer of the House
of Representatives