An act relating to revenue and taxation, the official text

1                            STATE OF OKLAHOMA

2   2nd Session of the 60th Legislature (2026)

3 HOUSE BILL 4305            By: Blair

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6                            AS INTRODUCED

7   An Act relating to revenue and taxation; establishing

    valuation method for certain real property for

8   purposes of ad valorem taxation; providing for

    requirements of real property to qualify for

9   valuation method; mandating county assessor to

    determine fair cash value according to valuation

10  method; establishing how fair cash value is

    determined after the first year the property has

11  completed active construction and stabilizes;

    providing for when the property is not subject to the

12  valuation method; creating additional tax; providing

    for determination for the amount of additional tax;

13  allowing for attachment of tax lien; requiring county

    assessor to deliver written notice via certified

14  mail; providing for when the additional tax becomes

    due and delinquent; prohibiting property owner from

15  protest in certain tax year; requiring county

    assessor to determine the percentage change in the

16  net income of property using certain standards;

    requiring owner to deliver audit to county assessor;

17  providing for codification; and providing an

    effective date.

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21 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:

22  SECTION 1.      NEW LAW  A new section of law to be codified

23 in the Oklahoma Statutes as Section 2865.1 of Title 68, unless there

24 is created a duplication in numbering, reads as follows:

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1   A. This act shall only apply to real property owned by an

2 organization:

3   1. For the purpose of renting the property to a low income or

4 moderate income individual or family satisfying the organization's

5 income eligibility requirements;

6   2. That was financed under the Oklahoma Affordable Housing Act

7 authorized pursuant to Section 2357.403 of this title, and is

8 subject to a land use agreement or regulatory agreement that has not

9 expired or been terminated;

10  3. That does not receive exempt treatment under Section 2887 of

11 this title; and

12  4. The owner of which has not entered into any agreement with

13 any taxing unit to make payments to the taxing unit instead of taxes

14 on the property.

15  B. In determining the fair cash value of a property described

16 in subsection A of this act, the county assessor shall determine the

17 fair cash value of property that is under active construction or

18 lease up on January 1 of the current tax year in the manner provided

19 by Section 8 of Article X of the Oklahoma Constitution, provided

20 that the county assessor shall estimate the property's gross income

21 potential and operating expenses based on the property's projected

22 income and expenses for the first full year of operation as adjusted

23 to reflect the percentage of construction of the property that is

24 complete as of January 1 divided by the construction budget for a

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1 property under active construction and, for properties undergoing

2 lease up, as adjusted to reflect the actual occupancy.

3   C. In determining the fair cash value of a property for the

4 first tax year following the completion of active construction and

5 stabilization of the property, the county assessor shall determine

6 the fair cash value of the property in the manner provided by

7 Section 8 of Article X of the Oklahoma Constitution.

8   D. In determining the fair cash value for a property for any

9 subsequent tax year after the first year following completion of

10 active construction and stabilization of the property, the county

11 assessor shall determine the fair cash value of the property by

12 adjusting the appraised value of the property for the preceding tax

13 year by the percentage change in the net income of the property in

14 the preceding year as compared to the year preceding that year.

15  E. If the fair cash value of a property that is determined

16 pursuant to the provisions of this act is sold and lo longer subject

17 to a land use restriction agreement or regulatory agreement

18 described by paragraph 2 of subsection A of this act, the property

19 is no longer eligible for appraisal under this act and an additional

20 tax is imposed on the property. The additional tax due is an amount

21 equal to the difference between the taxes imposed on the property

22 for each of the three (3) years preceding the year in which the

23 property is sold that the fair cash value of the property was

24 determined by this act and the taxes that would have been imposed

    Req. No. 14467                                                  Page 3
1 had the property been appraised at the sale price in each of those

2 years, indexed using each year's net income percentage change

3 derived from subsection D. A tax lien attaches to the property on

4 the date the property is sold to secure payment of the additional

5 tax imposed by this subsection. The lien exists in favor of all

6 taxing units for which the additional tax is imposed. The

7 additional tax imposed by this subsection does not apply to a year

8 for which the tax had already been paid off the sale price.

9   F. A determination that property is no longer eligible for the

10 valuation method under this act is made by the county assessor in

11 which the property is located. The county assessor shall deliver

12 written notice via certified mail of the determination to the owner

13 of the property as soon as possible after making the determination

14 and shall include in the notice an explanation of the owner's right

15 to protest the determination. If the owner does not file a timely

16 protest or if the final determination of the protest is that the

17 additional taxes are due, the county assessor shall prepare and

18 deliver a bill for the additional taxes as soon as practicable. The

19 taxes are due and become delinquent and incur penalties and interest

20 as provided by law for ad valorem taxes imposed if not paid before

21 the next February 1 that is at least twenty (20) days after the date

22 the bill is delivered to the owner of the property.

23  G. Notwithstanding any other law, a property owner may not

24 bring a protest for any tax year in which the fair cash value of the

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1 owner's property is determined by adjusting the property's fair cash

2 value by the percentage change in the net income of the property as

3 provided by this act. Notwithstanding any other law, a property

4 valued under this act may not be utilized as comparable property for

5 any property that is not valued under this act.

6   H. For purposes of this act, the county assessor shall

7 determine the percentage change in the net income of property using

8 generally accepted valuation standards for expenses, based on the

9 information and is contained in an audit of the organization that

10 owns the property prepared by an independent auditor covering the

11 relevant fiscal period.

12  I. Not later than May 1 of each year, an owner shall deliver to

13 the county assessor the audit for the preceding year. The county

14 assessor may extend the deadline for good cause shown.

15  SECTION 2. This act shall become effective January 1, 2027.

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17  60-2-14467      AO      01/08/26

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