Purpose, authority, and objective of ratio study rules

# (a) Purpose

(a) Purpose. The purpose of this part is to ensure that real property in Arkansas is appraised accurately and uniformly in accordance with constitutional and statutory requirements, most notably Arkansas Code § 26-26-1902 and § 26-26-304(e)(1).

# (b) Authority

(b) Authority.

(1) Arkansas Code § 26-26-304 directs the Assessment Coordination Division to prepare a ratio study by classification for each county and school district in valuation years.

(2) This part sets forth the:

(A) Procedures the division will follow in conducting these studies for properties appraised on a market value standard; and

(B) Requirements of counties and contractors in assisting the division in effective completion of such studies.

(3) References to “counties” in this part include contractors or vendors who work for or assist counties in the revaluation and assessment process.

# (c) IAAO standards

(c) IAAO standards.

(1) Arkansas Code § 26-26-304(a)(3) directs the division to use generally accepted valuation procedures and techniques found in the International Association of Assessing Officers’ (IAAO) standards on ratio studies.

(2) As a general matter, both the assessors and the division should follow IAAO standards in preparing sales for the ratio study and in conducting such studies.
(3)(A) This part is intended to provide specific guidance and requirements for conducting ratio studies in Arkansas consistent with IAAO standards.

(B) However, where there may be differences or discrepancies between this part and IAAO standards, this part shall control.

# (d) Property type

(d) Property type.

(1) Property values must be uniform among and within major property types.

(2) The division’s ratio study of real properties appraised on a market value standard shall utilize the following three (3) major types or classes of property:

(A) Residential properties, including multi-family properties with four (4) units or less;

(B) Vacant land, regardless of zoning or probable use; and

(C) Commercial and industrial properties, including multi-family properties with five (5) or more units.

# (e) Market areas

(e) Market areas.

(1) Property values must be uniform across and within major geographic divisions of a county.

(2) Each county shall define major geographic areas, termed “market areas”.

(3) Each market area shall contain between one thousand (1,000) and twenty thousand (20,000) parcels, depending on value patterns and the economic diversity of the county.

(4) Market areas can be viewed as groups of neighborhoods in the same geographic area or areas that share similar economic characteristics and price ranges.

(5) Smaller or economically homogeneous counties may have a single market area.

# (f) Technology

(f) Technology.

(1) The ratio study shall be performed efficiently using modern data processing technology.

(2) Counties must submit data to the division in electronic format in standard formats provided by the division.