SB 1724

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_STATUTE42-13302. 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