PURPOSE: This rule describes the content and guidelines for the composition of appraisal reports as exhibits and is consistent with sections 137.122 and 339.500 to 339.549, RSMo, which limit who may provide real and personal property appraisal services for a fee in hearings before the State Tax Commission and the requirements of an appraisal report used as evidence at a State Tax Commission hearing.

1. (1) As used in this rule, a “complete narrative appraisal report” for real property should be paginated for easy reference and should contain the following elements:

   1. (A) A narrative introduction, including:

      1. 1. A statement of purpose, including a

statement of the property interest being valued;

1. 2. A description of the subject property

including, but not limited to, a legal description of the property and any leasehold interests; address, locator number where applicable; land and improvement area; zoning, topography, and neighborhood;

1. 3. A statement of the highest and best

use of the subject property; and

1. 4. An opinion of the true value in money

of the subject property;

1. (B) A statement of the recognized approaches to value with a statement of why each approach was or was not used.

   1. 1. An income approach should include:

      1. A. A complete reconstructed income

and expense statement for the subject property showing economic or market values for each of the following elements:

1. (I) Potential gross income;
2. (II) Vacancy and collection loss;
3. (III) Miscellaneous income;
4. (IV) Effective gross income;
5. (V) Operating expenses; and
6. (VI) Net operating income;
7. B. The capitalization method and rate

used including all calculations, a narrative explanation of why the capitalization method is appropriate and an explanation of each element of the selected method;

1. C. A statement of the applicable tax

levy rate;

1. D. Sources of actual and market

expense, income, and capitalization rate figures and verification for each; and

1. E. A final indication of value.
2. 2. A sales comparison approach should

include:

1. A. The name of the owner(s), the

location, date of sale, conditions of sale, land and improvement areas, sales price, and source of information for each comparable sale;

1. B. A narrative explanation of why the

comparable properties were selected for use;

1. C. A statement that the sales have

been verified and by and with whom they were verified;

1. D. A specific listing of adjustments

made; and

1. E. A final indication of value includ-

ing a narrative explanation of why that value was chosen.

1. 3. A cost approach should include:

   1. A. An opinion of the value of the sub-

ject land and a description of the methodology used to arrive at that opinion;

1. B. A narrative explanation of whether

the replacement cost or the reproduction cost was used and why;

1. C. An estimate of the reproduction

cost or replacement cost new, including the method used and sources employed to arrive at that estimate;

1. D. The amount and type of deprecia-

tion applied with a narrative explanation of why the depreciation was applied and the methods employed; and

1. E. A final indication of value.
2. 4. Any other approach to value used

should be explained with sufficient specificity to allow all other parties to reconstruct the approach used. A narrative explanation of why the approach was used should be included;

1. (C) A final opinion of value which correlates all approaches used including a narrative explanation of any weighing process used to arrive at that final opinion of value; and
2. (D) The signature of the appraiser. 12 CSR 30-3

1. (2) As used in this rule, an appraisal report for personal property should, at a minimum, conform to Uniform Standards of Professional Appraisal Practice (USPAP) requirements for a summary appraisal, must be a narrative report, and must contain the following elements:

   1. (A) A description of the property, including a complete inventory of all personal property being valued;
   2. (B) Original cost of each item;
   3. (C) The class life of each item as set out in the federal Modified Accelerated Cost Recovery System life tables or their successors under the Internal Revenue Code as amended; and
   4. (D) The value of each item by applying the class life and recovery period to the original cost of the property according to the standardized schedule of depreciation as set forth in section 137.122, RSMo.
2. (3) Beginning July 1, 1999, it will be unlawful for any person who is not licensed or certified by the Missouri Real Estate Appraisers Commission as provided in sections 339.500 to 339.549, RSMo, to, for a fee, develop and offer into evidence a real estate appraisal or appraisal report, as those terms are defined in section 339.503(1) and (4), before the commission unless such person is exempt from licensure and certification pursuant to section 339.501.5, RSMo Supp. 1998.
3. (4) Any appraisal or appraisal report, as those terms are defined in section 339.503
4. (1) and (4), which is filed with the commission or offered into evidence pursuant to 12 CSR 30-3.060 shall contain the Missouri Real Estate Appraisers Commission certificate or license number of the person or persons who developed the appraisal or appraisal report, or a statement setting forth the basis for exemption from licensure and certification for such persons pursuant to section 339.501.5, RSMo Supp. 1998. Any such appraisal or appraisal report failing to comply with this provision will be excluded from evidence at the evidentiary hearing on the valuation of the property under appeal.
5. (5) Any written direct testimony of a person, testifying as to an appraisal or appraisal report, as those terms are defined in section 339.503(1) and (4), which is filed with the commission or offered into evidence pursuant to 12 CSR 30-3.060 shall contain testimony stating the Missouri Real Estate Appraisers Commission certificate or license number of the person or persons who developed the appraisal or appraisal report, or a statement setting forth the basis for exemption from licensure and certification for such person or persons pursuant to section 339.501.5, RSMo Supp. 1998, of the person or persons whose written direct testimony is being offered into evidence. Any such written direct testimony failing to comply with this provision will be excluded from evidence at the evidentiary hearing on the valuation of the property under appeal.

AUTHORITY: sections 137.122.4, 138.430, and 138.431, RSMo Supp. 2012.* Original rule filed Aug. 23, 1995, effective Jan. 30, 1996. Amended: Filed March 30, 1999, effective Oct. 30, 1999. Amended: Filed Dec. 29, 2005, effective Aug. 30, 2006. Amended: Filed Jan. 17, 2013, effective July 30, 2013. *Original authority: 137.122, RSMo 2005, amended 2008; 138.430, RSMo 1939, amended 1945, 1947, 1978, 1983, 1989, 1999, 2008; and 138.431, RSMo 1983, amended 1986, 1992, 1999, 2010.