Property Valuation Division, Directive

Directive Number:92-002(Rev)
Tax Type:Property Tax
Brief Description:Recision of Directives
Keywords:
Effective Date:11/03/1995


Body:
DIRECTIVE #92-002 (Rev)

TO: County Appraisers

SUBJECT: Substantial Compliance


This directive is adopted pursuant to the provisions of K.S.A. 1994 Supp. 79-506, and shall be in force and effect from and after the Director's approval date.

The following criteria and standards shall be used for 1995 and subsequent years to determine whether a county is in substantial compliance with the statutory requirement to uniformly appraise real and personal property at its fair market value, as defined by K.S.A. 79-503a, and amendments thereto. In order to establish compliance or lack of compliance in each county, the Division of Property Valuation (PVD) shall conduct a ratio study as required by K.S.A. 79-1485 et. seq. PVD shall conduct a procedural audit in each county covering items deemed essential to establishing fair market value. PVD shall determine whether specific Kansas statutes pertaining to property taxation have been followed. Whenever sufficient valid sales within a single property subclass cannot be obtained for the ratio study, or whenever the confidence level for the subclass suggests the median ratio or coefficient of dispersion measure is unreliable, compliance shall be determined according to the procedural and statutory review.


CRITERIA AND STANDARDS

Any county achieving 75 to 100 points (as explained on page 3-6) shall be found in substantial compliance. Any county achieving 74 or less points shall be found in noncompliance and required to submit a detailed plan to correct areas of noncompliance.

A county in noncompliance may be audited on all property tax functions and responsibilities depending on the reason the county is found to be in noncompliance. An audit may be initiated if the county does not implement its approved plan and correct the area or areas in noncompliance. If a county is found to be in noncompliance in the same subclass in the next compliance period, a full audit shall be conducted. When a county is in noncompliance in the same subclass for two consecutive years the Director may pursue all legal options, including, but not limited to, proceedings before the State Board of Tax Appeals and/or the removal of the county appraiser.

An Administrative Review designation shall be assigned to any county in which a subclass, as a whole, indicates compliance, but in which one or more stratifications (age or price by neighborhood) indicates a failure to meet the basic statistical standards for Ratio or Coefficient of Dispersion (COD). Counties subject to Administrative Review shall be required to submit a plan to correct the area or areas not meeting the basic statistical standards. Counties are reminded that administrative appeals to the Director and State Board of Tax Appeals are available.

Examples of points used for the measuring of compliance and the weighting of those points are found on the next four pages.


MEASURE OF COMPLIANCE:
Measure Points

1. Statistical Measures Total Weight 50
a. Appraisal Level 25
b. Appraisal Uniformity 25

The total of (a.) and (b.) shall be multiplied
by the subclass weight for Commercial/Industrial
and Residential.

2. Procedures 36
a. Reappraisal plan 4
b. Cost index 4
c. Sale file 4
d. Depreciation documentation 4
e. Income approach 4
f. Comparable sales approach 4
g. 25% maintenance reinspection 4
h. Land valuation model calibration 4
i. Final review process 4

3. Agricultural Use Valuation 2

4. Cadastral Mapping 2

5. Constitutional and Statutory Compliance Checklist 10
a. CVN's mailed and trend study published timely 2
b. Hearings conducted within statutory
time frame 2
c. Certification to clerk timely 2
d. Personal property listed correctly 2
e. Retention of records 2

TOTAL 100


SUBCLASS WEIGHTING

The statistical compliance of "residential" and "commercial/industrial"" subclasses shall be determined separately. Each subclass shall be weighted by its percentage of the combined appraised value of the two subclasses, as derived from the statistical abstract, to demonstrate the county's statistical compliance. These calculated weights shall vary from county to county and from year to year. If a 95% confidence interval can not be achieved with respect to the median ratio or coefficient of dispersion, the points assigned to the statistical measures for that subclass shall be omitted thereby establishing a new base of total possible points. The total points assigned to a county shall be divided by the adjusted base, total possible, and multiplied by 100 to arrive at the total points used to determine substantial compliance. This method adds more emphasis to the procedural review. The following is an example of the weighting procedure:

APPRAISED % OF
SUBCLASS VALUE APPRAISED

RESIDENTIAL $250,000,000 84.7%
COMMERCIAL/INDUSTRIAL $45,000,000 15.3%
TOTAL APPRAISED VALUE $295,000,000 100.0%

% OF COMPLIANCE WEIGHTED
SUBCLASS APPRAISED POINTS POINTS

RESIDENTIAL 84.7% 50 42.4
COMMERCIAL/
INDUSTRIAL 15.3% 25 ( Ratio 88) 3.8
STATISTICAL COMPLIANCE POINTS 46.2

PROCEDURES 23.0
AGRICULTURAL USE VALUATION 0.0
CADASTRAL MAPPING 2.0
CONSTITUTIONAL / STATUTORY 10.0
NON STATISTICAL COMPLIANCE POINT 35.0
TOTAL COMPLIANCE POINTS 81.2

(Compliance Review Sample 1, an Excel document goes here. Not part of this document)

(Compliance Review Sample 2, an Excel document goes here. Not part of this document)


I. STATISTICAL COMPLIANCE REVIEW

The following statistical review shall be used to establish whether the county's appraisal performance is in substantial compliance pursuant to Property Valuation Division statistical measures and Kansas statutes.

A. APPRAISAL LEVEL:



Date Composed: 10/02/1997 Date Modified: 10/11/2001