1. (a)

   1. (1) During the first three (3) years of implementation of this part, an Administrative Adjustment shall be utilized by the Tax Division of the Arkansas Public Service Commission in order to arrive at the Final System Value.
   2. (2) The Final System Value for each year after the third year of implementation of this part will be the Correlated Value determined in 26 CAR § 230-106.

2. (b)

   1. (1) The Administrative Adjustment figure shall be derived by utilizing last year’s Final System Value and adjusting this by the total net amount of change in total telephone plant, which would include construction work in progress, from the year immediately preceding the assessment date.

   2. (2)

      1. (A) For the first year of implementation of this part, the Final System Value component shall be last year’s Correlated Value.
      2. (B) For each year thereafter, last year’s Final System Value shall be that value that results from the weighting as described below of the Correlated Value and the Administrative Adjustment.

3. (c) Weighting percentages to arrive at final system value.

   1. (1) The Correlated Value from 26 CAR § 230-106 shall be weighted seventy-five percent (75%) and the Administrative Adjustment figure shall be weighted twenty-five percent (25%).
   2. (2) For telephone companies in which there is available neither a market price nor appropriate surrogate to develop a reliable stock and debt approach or income capitalization approach, the Correlated Value from 26 CAR § 230-106 and the Administrative Adjustment figure shall be weighted as follows:

      	Year 1	Year 2	Year 3
      Correlated Value	25%	50%	75%
      Administrative Adjustment	75%	50%	25%

   3. (3) In instances in which the property is new and the cost approach alone is used as specified in 26 CAR § 230-106 for the first assessment year, the Administrative Adjustment shall be used and weighted with the Correlated Value determined in 26 CAR § 230-106 in the second assessment year and each year thereafter as specified in either subdivision (c)(1) or (c)(2) of this section.

Codification Notes: This section was promulgated as Section V of the Market Valuation Rules for Telephone Companies prior to codification into the Code of Arkansas Rules.