LAC 61:V.111 — Criteria for Determining Fair Market Value

A. The criteria for determining fair market value shall apply uniformly throughout the state. Uniform guidelines, procedures and rules and regulations as are necessary to implement said criteria shall be adopted by the Louisiana Tax Commission only after public hearings held pursuant to the Administrative Procedure Act (R.S. 47:2323.A).
B. Each assessor shall follow the uniform guidelines, procedures, and rules and regulations within his respective parish or district in determining fair market value of all property subject to taxation. Any manual or manuals used by an assessor shall be subject to approval by the Louisiana Tax Commission or its successor agency (R.S. 47:2323.B).
C. The fair market value of real and personal property shall be determined by the following generally-recognized appraisal procedures: the market approach, the cost approach, and/or the income approach.
1. In utilizing the market approach, the assessor shall use an appraisal technique in which the market value estimate is predicated upon prices paid in actual market transaction and current listings.
2. In utilizing the cost approach, the assessor shall use a method in which the value of a property is derived by estimating the replacement or reproduction cost of the property; deducting therefrom the estimated depreciation; and then adding the market value of the land, if any.
3. In utilizing the income approach, the assessor shall use an appraisal technique in which the anticipated net income is capitalized to indicate the capital amount of the investment which produces the net income (R.S. 47:2323).
NOTE: See Definitions, Chapter 3, for the appropriate use of these approaches.
D. When performing a valuation of any affordable rental housing property, the assessor shall not consider any of the following in determining fair market value:
1. income tax credits available to the property under section 42 of the Internal Revenue Code;
2. below-market interest rate on financing obtained under the Home Investment Partnership Program under the Cranston-Gonzales National Affordable Housing Act, or the Federal Home Loan Bank Affordable Housing Program established pursuant to the Financial Institution Reform, Recovery, and Enforcement Act of 1989;
3. any other federal, state, or similar program intended to provide or finance affordable rental housing to persons of low or moderate income and requiring restricted occupancy and rental rates based on the income of the persons occupying such housing.
NOTE: Also see, Chapter 2, §213.G-G.3 and Chapter 3, §303.C.4-4.c.