Arkansas 2025 Regular Session

Arkansas Senate Bill SB573 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		Stricken language would be deleted from and underlined language would be added to present law.
2		-	Act 783 of the Regular Session
3	2		JLL314 03/28/2025 9:06:16 AM JLL314
4	3		State of Arkansas 1
5	4		95th General Assembly A Bill 2
6	5		Regular Session, 2025 SENATE BILL 573 3
7	6		4
8	7		By: Senators J. Petty, Caldwell 5
9	8		By: Representative Jean 6
10	9		7
11	10		For An Act To Be Entitled 8
12	11		AN ACT TO AMEND THE METHOD OF VALUATION UNDER 9
13	12		ARKANSAS CONSTITUTION, ARTICLE 16, § 5, BY DEFINING 10
14	13		THE TERMS USED IN THE ESTABLISHED METHODS OF 11
15	14		VALUATION FOR PURPOSES OF PROPERTY TAX; TO CLARIFY 12
16	15		AND DEFINE A STANDARD OF VALUATION FOR PROPERTY TAX; 13
17	16		AND FOR OTHER PURPOSES. 14
18	17		15
19	18		16
20	19		Subtitle 17
21	20		TO AMEND THE METHOD OF VALUATION UNDER 18
22	21		ARKANSAS CONSTITUTION, ARTICLE 16, § 5, 19
23	22		BY DEFINING THE TERMS USED IN THE 20
24	23		ESTABLISHED METHODS OF VALUATION FOR 21
25	24		PURPOSES OF PROPERTY TAX. 22
26	25		23
27	26		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
28	27		25
29	28		SECTION 1. DO NOT CODIFY. Legislative intent. 26
30	29		The General Assembly intends for this act to be remedial and to clarify 27
31	30		the law. 28
32	31		29
33	32		SECTION 2. Arkansas Code Title 26, Chapter 23, Subchapter 1, is 30
34	33		amended to add an additional chapter to read as follows: 31
35	34		26-23-101. Definitions. 32
36	35		As used in this subtitle: 33
37	36		(1) "Cost approach" means an approach used to estimate the fair 34
38	37		market value of property based on the estimated current cost to construct 35
39	38		improvements plus the value of the land minus all forms of depreciation, 36 SB573
40	39
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42	41		including without limitation any loss in value caused by physical 1
43	42		deterioration, functional obsolescence, economic obsolescence, or any 2
44	43		combination of physical deterioration, functional obsolescence, or economic 3
45	44		obsolescence; 4
46	45		(2) "Economic life" means the period of time over which a 5
47	46		structure or component of property may reasonably be expected to be 6
48	47		profitably used for the purpose originally intended; 7
49	48		(3) "Economic obsolescence" or "external obsolescence" means the 8
50	49		loss in value of property caused by factors external to the property, 9
51	50		including without limitation the economics of an industry, increased costs or 10
52	51		loss of material or labor sources, lack of utilization, excess operating 11
53	52		costs, new legislation or regulation, changes in ordinances, reduced demand, 12
54	53		increased competition, inflation or interest rates, and other factors; 13
55	54		(4) "Fair market value", "market value", "true and full market 14
56	55		or actual value", "true market value", or "usual selling price of similar 15
57	56		property" means the value prescribed by Arkansas Constitution, Article 16, § 16
58	57		5, which is the most probable price expressed in terms of money that a 17
59	58		property will bring on the open market in a transaction between a willing and 18
60	59		knowledgeable seller and willing and knowledgeable buyer in an arms -length 19
61	60		transaction; 20
62	61		(5) "Functional obsolescence" or "internal obsolescence" means 21
63	62		the loss in value of property caused by the inefficiencies or inadequacies of 22
64	63		the property itself, resulting from changes in tastes, preferences, technical 23
65	64		innovations or improvements, market standards, or other factors; 24
66	65		(6) "Income approach" or "income and expense approach" means an 25
67	66		approach used to estimate the fair market value of property based on the 26
68	67		present value of the projected income stream ultimately attributable to the 27
69	68		taxable portion of the property; 28
70	69		(7) "Market approach" or "sales comparison approach" means an 29
71	70		approach used to estimate the fair market value of property based on 30
72	71		comparing sales of similar properties by identifying appropriate units of 31
73	72		comparison and making qualitative comparisons with or quantitative adjustment 32
74	73		to the sales prices of the comparable properties based on relevant market -33
75	74		derived elements of comparison; 34
76	75		(8) "Physical deterioration" or "physical depreciation" means a 35
77	76		loss in value of property resulting from the using up or expiration of the 36 SB573
78	77
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80	79		useful life or economic life of the property caused by ordinary wear and 1
81	80		tear, deterioration, physical stresses, the forces of nature, or other 2
82	81		factors; 3
83	82		(9) "Physical life" means the period of time over which a 4
84	83		structure or component of property may reasonably be expected to physically 5
85	84		exist before deteriorating or fatiguing to an unusable condition from 6
86	85		physical causes; and 7
87	86		(10) "Useful life" means the period of time over which a 8
88	87		structure or component of property may reasonably be expected to perform the 9
89	88		function for which the structure or component of property was designed. 10
90	89		11
91	90		SECTION 3. EFFECTIVE DATE. Section 2 of this act is effective for 12
92	91		assessment years beginning on or after January 1, 2025. 13
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95		-	~~APPROVED: 4/17/25~~ 16
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