1. (a) Level of compliance.

   1. (1) Counties conducting a revaluation must comply with ratio study standards for real property appraised on a market value basis both on an overall basis and for each of the following three (3) major property type strata:

      1. (A) Residential;
      2. (B) Vacant land; and
      3. (C) Commercial and industrial.
   2. (2) In addition, ratio study standards must be achieved for residential properties and vacant land within each market area.

2. (b) Overall level of assessment.

   1. (1) The overall level of assessment must be from .18 to .22.

   2. (2) The overall level of assessment shall be computed as a weighted average of the median ratio determined for each of the three (3) major classes:

      1. (A) Residential;
      2. (B) Vacant; and
      3. (C) Commercial/industrial.
   3. (3) The weight assigned to each major class shall be proportionate to the estimated market value of the class.
   4. (4) Any property that constitutes more than five percent (5%) of the assessed value of its class shall be omitted for purposes of the calculation.

3. (c) Level of assessment of class.

   1. (1) The level of assessment for each major class (residential, vacant, and commercial/industrial) must be from eighteen percent (18%) to twenty-two percent (22%).

   2. (2) The Assessment Coordination Division shall conclude that a county has failed this requirement if statistical analysis reveals with ninety-five percent (95%) confidence that:

      1. (A) The true median assessment level is below eighteen percent (18%) or above twenty-two percent (22%); or
      2. (B) Equivalently that a ninety percent (90%) confidence interval for the median falls entirely below eighteen percent (18%) or entirely above twenty-two percent (22%).

4. (d) Level of assessment of market area.

   1. (1) The level of assessment for residential properties and vacant land within each market area of a county must be from eighteen percent (18%) to twenty-two percent (22%).

   2. (2) The division shall conclude that a county has failed this requirement if statistical analysis reveals with ninety-five percent (95%) confidence that:

      1. (A) The true median assessment level is below eighteen percent (18%) or above twenty-two percent (22%); or
      2. (B) Equivalently that a ninety percent (90%) confidence interval for the median falls entirely below eighteen percent (18%) or entirely above twenty-two percent (22%).

5. (e) Uniformity of assessment.

   1. (1)

      1. (A) The coefficient of dispersion (COD) must meet the standards shown below.
      2. (B) The division shall conclude that these standards are not met when a statistical analysis reveals with ninety-five percent (95%) confidence that the true COD is greater than the required COD.
      3. (C) The procedure outlined in Robert J. Gloudemans’ “Confidence Intervals for the COD: Limitations and Solutions”, Assessment Journal (IAAO, November/December 2001), will be used for this purpose.

   2. (2) Residential property. The COD must be:

      1. (A) 15.0 or less in market areas located in counties with fifty thousand (50,000) or more parcels; and
      2. (B) 20.0 or less in market areas located in counties with less than fifty thousand (50,000) parcels.

   3. (3) Vacant land. The COD must be:

      1. (A) 20.0 or less in market areas located in counties with fifty thousand (50,000) or more parcels; and
      2. (B) 25.0 or less in market areas located in counties with less than fifty thousand (50,000) parcels.

   4. (4) Commercial property. The COD must be:

      1. (A) 20.0 or less in counties with fifty thousand (50,000) or more parcels; and
      2. (B) 25.0 or less in smaller counties.
   5. (5) As experience is gained, the division may tighten these standards so that they are closer to or equivalent with IAAO standards for the COD.

6. (f) Failure to comply. If a county fails to meet the level or uniformity standards set forth in subsections (b) – (e) of this section, above, the division shall:

   1. (1) Promptly notify the county assessor, the appraisal manager, the board of equalization, and the county judge of the out-of-compliance status and withholding of funding; and
   2. (2) Invoke the corrective actions outlined in Arkansas Code § 26-26-304(f).

7. (g) Selective appraisal of sold properties.

   1. (1) The division shall vigilantly monitor whether counties are appraising unsold properties in the same manner as sold properties.
   2. (2) Such tests shall include but not be limited to a comparison of percentage changes in value for sold and unsold properties of the same property type in the same market area (excluding new parcels and parcels with new construction).
   3. (3) The division may also employ other tests of selective appraisal outlined in IAAO ratio study standards and the IAAO textbook, Mass Appraisal of Real Property.

   4. (4) If the division determines that a county is not appraising unsold properties in a property type, market area, or other property stratum in the same manner as sold properties, the division shall:

      1. (A) Deem that the county has failed that portion of the ratio study and its responsibility to appraise properties uniformly at market value; and
      2. (B) Invoke the corrective actions outlined in Arkansas Code § 26-26-304(f).

Codification Notes: “IAAO” means International Association of Assessing Officers.